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No. 30,379 


EUROPE’S BUSINESS NEWS|, 

Tuesday November 



IMES 


After the arms deal: 

Respmningthe 
nuclear web. Page 27 


D 8523 A 


World News 





Gadaffi to 
stay away 
from Arab 
summit 


Col Huamroer Gadaffi of Libya 
announced he would not 'attend 
the Arab summit scheduled to 
begin in Amman, Jordan, on 
... Sunday, but proposed another 
meeting which could an 

Arab atomic bomb. 

The announcement empha- 
sised difficulties, the confer- 
ence _ could fees in reaching 
unanimity on a common stand 
against Iran. Paged 
Meanwhile, the Pentagon said 
a US frigate had openedfire on 
one of three suspected Iranian 
vessels that approached at high 
speed in the Gulf 

Sharon cash inquiry 

Israel’s Justice Minis try or* 
s dered police to investigate alle- 
gations that Trade and industry 
Minister Ariel Sharon illegally 
' c h a n nelled ■ money and con* 
tracts to political allies: 

S Africa storms base 

South African forces stormed a 
guerrilla base in southern An- 
gola, killing more than 15(E Na- 
mibian nationalist guerrillas 


Business Summary 


Orion pulls 
but of gilt, 
Eurobond 
markets 


QUON BOTAL BANK, London- 
based Investment banking arm 
‘ of the Royal Bank of Canada, is 
'withdrawing from market-mak- 
ing in UK government bonds 
and Eurobonds, with the loss of 
up to 150 jobs. Page 28 

-SANTA PE Southern Pacific, tug 
US transport group which is un- 
der orders from anti-trust au- 
thorities to split up its core rail- 
road hold Ing a, and Henley 
Group, California-based con- 
glomerate. are holding talks 
which could lead to the 
non-oil takeover in US history. 
Page 29 

SINGER, US defence electron- 
ics group and former sewing 
machine maker, received a 
$50 a share takeover offer from 
a group of investors led by Hr 
Paul Siberian, Florida corpo- 
rate raider. Page 2S 

GREYHOUND, diversified US 
consumer products and trans- 
port equipment Concern, 
booked a 15 per cent rise in 
third-quarter income from con- 
tinuing operations despite , a 
$5 4m increase in losses at its 


and losing 11 of their own men,. 

Pretoria said. Page 4 TT ^rex^igage insurance bnsi- 



Challenge welcomed 

West Germany welcomed the 
first Soviet 'challenge inspec- 
tion” of. military exercises on 
West German soil Troo p -cats fo- 
ran,Page2 

Freetown emergency 

Sierra Leone citizens were 
barred from hoarding money 
and essential commodities un- 
der a state of emergency de- . 
dared to resolve economic 
problems. 

Aid for Nazi victims. 

Bonn coalition leaders agreed 
to allocate an extra DMSOOm 
(8173m) to victims of the Nazi 

era, including those who were 

forcibly sterilised. The decision . Page 29 
must be ratified by parliament 


fiUNK Ni'Mm, ns Mo^n gtneer - 
ing company, reported third- 
quarter net earnings of $52m or 
6 cents a share, upfrom $3.7m 
or 8 edits in the same period 
last yaar.Pags 29 

Kn PCT nflnaiiimi Bnanrial nwri 

resource-based conglomerate, 
has stepped in to help Wood 
Gundy, bine chip Investment 
dealer, over problems arising 
from its heavy invo l v e ment in 
the BP privatisation issue. Phgs 
29 

TSB, British henkiwg group’s 
small shareholders 'have re- 
belled publicly against its 
£777m ($L33bn) bid for Hfll 
Samuel, merchant bank, at a ita- 

rious 6W hour extraordinary 

general meeting in London. 


V 

*■ t *. • » * • - * 


Palestinians on strike 

Palestinians <4MfiAlb8{Si9h8l& 
demonstrated SsdSnwolBte 
li vehicles in tbsoKspied Wed 
Bank and Gaza Strip on the 70th 
anniversary of the Balfoor Dec- 
laration in which Britain prom- 
ised a Jewish homeland In Pal- 
estine. 

Philippines attack 

Gunmen attacked private secu- 
rity guards and seized . their 
weapons outside a major. US air 
base in the Philippines where 
three Americans were shot and ■ 
killed last week. . . . . 

RAF jets collide " _ 4 . 

CSS’K? ass 


SCIOTOMO UFEr targe: Japa- 
nese life insurance company, is 
to take a stake of up to 2 per 

■NT" 

ROMATHX, South African tex- 
tiles and floor coverings maker; 
reported Increased sales B552m 
C$214. fen) for year to June, com- 
pared with RI BO m t for same pe- 
riod last year. Page SS 

MESSINA, South African min- 
ing company,, has- de fe rred its 
B82m (tSOJhn) rights issue an- 
nounced three weeks ago, be- 
cause of the collapse In Johan- 
nesburg stock prices. Page S3 

BRICK AND PIPE Industries, 
Melbourne-based building 


when their Royal Air Force 
Harrier jets collided in mid-air 
over northern En gl a nd. . 


Hong Kong fraud case 

Ten people, including seven 
former or serving government 
officials, were charged in Hong 
Kong with corruption linked 
with the faulty construction of 
26 public bousing blocks. 

Helmet demo deaths 

rwo people were killed and 13 
injured when Indonesian secu- 
- rity forces dashed with thou- 
sands of students protesting 
.against the enforced wearing of 
motorcycle helmets. Page 4 

Salvador traffic ban 

El Salvador’s army would or- 
ganise convoys and provide 
trucks to take people to work in 
an attempt to thwart a national 
ban on traffic called by leftist 
guerrillas, a military chief said. 

Turkish toll 

Seven Kurdish separatist guer- 
rillas and a Turkish soldier 
were killed in a dash about 
100km from the Iraqi border in 

south-east Siirt province. 

Argentine ice alert 

A 150m-tall iceberg was sighted 
near* shipping lanes off 
southern Argentina, on an on- 
usual path. 


up to A$iB7m 
from A$495m. Page 


(Ui 

32 


BAN4K7E ftancalae da 
mm Kxteriear, French state- 
controlled bank, hopes to open 
its capital to outside investors, 
inducing customers and em- 
ployees, as early as next year. 
Page 29 • 

BANCO deVhcaya, Spain’s fifth 
largest commercial bank, re- 
ported a strong rise in pre-tax 
profits for. first nine months, up 
23 pec cent to PtaHUbn CfUBm} 
compared with same period a 
year ago. Page 30 

THOMSON, French state-con- 
trolled defence and consumer 
electronics group, reported flat 
first-half consolidated net earn- 
ings of FFrU45bn (5197m). 
Page 30 

STANDARD .Chartered Asia, 
merchant bankhig arm of Stan- 
dard Chartered Bank, has 
agreed in principle to acquire a 
majority stake in Chinttuxg 
Holdings, big Hong Kong stock- 
broker. Page 31 

MONTEDISON CHAIRMAN 
Mario Schimbemi, has written 
to the president of the ENI state 
holding group in Rome with a 
proposal to pool the two group’s 
chemicals activities. Page 29 

ITALTEL, Italian telecommuni- 
cations group, should post net 


Gorbachev denounces undemocratic bureaucracy 



MR MIKHAIL Gorbachev, the 
Soviert leader, yesterday made 
his most radical and co mpre- 
hensfve criticism of the way So- 
viet society is managed since he 
cause to power. promised a commission to 

He said In an address to cede- amine the rehabilitation 
lnste the 70th anniversary of those killed or imprisoned, 
the Bolshevik revolution that 
the central bureaucratic con- 
trol of the economy was fonda- 
mentalJy undemocratic and 
nothing in common with social- 
ism. 

The introduction of democra- 
cy and freedom of expression, 
he stressed, was the essential 
lition for economic re- 


BV PATRICK COCKBWM W MOSCOW 


■5SSBS2 


attacked Stalin fbr the parges 


Mr Gorbachev strongly attack- 
ed Stalin for carrying out the 
* purges in 1937-38 and 

wnmimri nn to ex- 

of 

The guilt of Stalin and his im- 
mediate entourage before the 
party and people for the whole- 
sale repressive measures and 
acts of lawlessness is enormous 
and unforgivable This is a les- 
son for all generations.' 

But the basic theme of his 
three-hour speech was less de- 
. . . nonciation of Stalin than a mea- 

„ development, al- "sored explanation of how cen- 

mougnhis own treatment of So- trallsed control of the economy 
vret history showed strong si g ns had been developed after 1929 
of compromise between radi- to concentrate all resources for 
cals and conservatives. the crash development of the 


economy. 

Although be gave credit to 
this system for rapid industri- 
alisation, he also strongly un- 
derlined that once established 
in the economy, it prevented the 
development of democracy and 
was at odds with the ideals of 
the 1917 revolution. 

Some Soviet and foreign ob- 
servers were disappointed that 
Mr Gorbachev did not directly 
rehabilitate some of the better- 
known victims of the purges, for 
instance, Nikolai Bukharin. But 
such a move may not be as good 
a barometer of radical opinions 
in the Soviet leadership as it 
once was. 

More important than such 
gestures may prove to be his 


sustained argument that Stal- 
in’s method of miming the econ- 
omy, of brutal collectivisation 
of agriculture and rapid indus- 
trialisation, may have answered 
real needs at the time bat were 
now obsolete and repulsive. 

Mr Gorbachev returned re- 
peatedly to his theme that the 
way Soviet society was run from 
1929 to 1985 had to change and 
was changing decisively. 

Although his comments on Ni- 
kita Khrushchev and Leonid 
Brezhnev, the Soviet leaders 
who succeeded Stalin, were 
mild, he linked the failure of 
economic reform in both cases 
to the failure to introduce more 
democracy. 

Continued on Page 28 
Background, Page 3; editorial 
eoanneat, Page26. 


China to push ahead 
with political and 
economic reforms 


BY ROBERT THOMSON IN PEKING 


THE CHINESE Communist Par- 
ly yesterday announced a Polit- 
buro stacked with successful re- 
fonners who seem certain to 
push ahead programmes to 
overhanl the party and econo- 
my- 

Seven officials have been ap- 
pointed to replace 10 departing 
Politburo members. The ap- 
pointments mean the Politburo 
is dominated by reformers. 

Zhao Ziyang, China’s Premier, 
formally became general secre- 
tary, the party’s most powerful 
official. 

The man he replaced, Hn 

Yanhang ; wny ririnpy m anug wi 

to keep a Politburo place de- 
spite his “ ~ 
ary. 


man power elite - shows signs of 
compromise with the conserva- 
tives who fear reform has gone 
too for, too fost Four new mem- 


HaH of the People after his con- 
firmation as general secretary. 

Zhao clearly enjoyed ftimmlf 
as he worked the crowd, boast- 



bera were appointed, including tog that the smart Western-style u Peng: right credentials 


i feu from grace in Jam- 


two vice-premiers, Li Peng and 
Yao Yfiin, who have publicly 
expressed doubts about the 
need of economic change. For 
the first the committee is 
without a Long March veteran. 

Hu Yaobang*s survival is a 
striking sign of the reformers’ 
victory, since his dismissal as 
premier, for allowing the 
spread of western ideas, was 
felt by many diplomats as a sign 
that reform was in decline. 

The reformers will now have 
no excuses If their programme 
Calls toproduce the desired re- 
Tne press 


suits he wears are made in Chi- 
na. He was accompanied by the 
four other members of the new 
Politburo Standing Committee, 


Li anxious 
to keep 

which remains unclear is the Mr 

the record 
straight 

By Robert Thomson In Poking 


Zhao said last night that an In- suite. Tbejaxum on tee new 
trim oremier would soon be leaders will be particularly in- 
tense in coming months, as eco- 
nomic reform has baton hin- 
dered fay .rising inflation, 
prompting fears in the parly 
about social unrest. 


tertm premier would soon be 
announced to allow him to con- 
centrate on party matters. Zhao, 
88, said a younger man would be 
ppointed and the vice-premier 

Li Feng; 50, has been tipped for 

the post 

Zhao scoffed at suggestions 

Mu. 

dering ..China’s, deV el opfatetit, 
•You know there were more 

than 1200 tel egates at the coo- 

grass, and they all voted in fa- 
vour of my work report How 
canyon say that there are fee- 
tionsr 

The gains made by the re- 
formers, who are attempting to 
liberalise economic and politi- 
cal systems, comes after a re- 
cent series of victories, indnd- 
the departure of more than 

officials from the central 

committee and the formal ac- 

forwide- 
refonn- 

Politburo 
standing committee - the five- 


political role of the military. It 
had been thought that General 
Yang Shantfcnn would be pro- 
moted to the standing commit- 
tee, but he has simply kept his 
place on the Politbnroi 
However, Chinese sources 

suggest that General Yang; SO, 

could become president early THE NEW number turn man in 
next year. the CMimm Communist Party Is 

The party’s secretariat, which sens iti v e about his past. While li 
looks after day to day affiatrs. Peng has tke csnrect revolution. 


... Deng Xfooping, 
who resigned Mi senior party 
ports on Sunday, retains^ * 
chairmanship of flue .central 
military commission .-and the 
last word in Chinese politics. 

Zhao said yesterday: ^ will of- 
ten ask Mr Dentfs advice so that 
I will be able to do thing bet- 
ter.' 

Asked about reforms in East- 

ern Europe, Zhao said that all 
Comnumirt countries were now 

working on ways to adapt Marx- 
ism and that they should Learn 
from, but not copy, each other. 

*China did not and will not com- 

pete with the Soviet Union,' he 
said. 

A beaming and relaxed Zhao, 
glass in Ima^ toasted and joked 
with journalists in the Great 


was cut from 11 members to 
four, and tort two prominent 
conservative officials, Chen Pix- 

ian and Deng Uqun. Members 

of tee Peking theatre company 

let off firec rac k er s at the news 

ofDengliqatftoeete- 
73ie streamlining of the party 
is designed to max* them- rime 

efficient and less prone to fric- 
tional disputes. Several secre- dees 


ary credentials, be feds un&irly 
labelled as a passionate central 
planner becanse of his years as a 
student to the Soviet Union. 
”8«ne people like to attach la- 

bels, se they ftlrt Art lust be- 
cause. 1 jttndigd in 
Union, I am in favour of the So-, 
wist. model. On the other hand. 


tarirt members have 

used the prestige of their posts 
to mount personal political 
campaigns, and the cumber- 
some central committee, 
trimmed from 209 members to 
173, met only once a year. 

The former SDmember Polit- 
buro has be reduced to 17, with 
one alternate member. 

China’s most powerful woman 

politician, Chen Muhna, gover- 

nor of the People’s Bank of Chi- 
na, the central bankyesterday 
lost her position as an alternate 

member of the Politburo. 


people study to the US, but 

mat mean ISiey necessarily 

fevour the US system?" Mr U 

asked last night 
U Peng, appointed to the par- 
ty's standing cemmlltre yester- 
day, has grown up with the Chi- 
nese leadership. He was adopted 
by the former premier, Zhon En- 
lat, having been orphaned at 
three, and Joined the Communist 
Party in 1945 at 17. 

Mr U, partly becanse of his 
R u s sian language skills, has 
been China's emissary to East- 

ern Europe, and has met Mr Mlk- 
hafl Gorbachev, the Soviet lead- 
, Continued on Page 28 


Dollar falls to 
record low 
against yen 


BY 8M0N HOLBSTTON M LONDON AND 
RODERICK ORAM M NEW YORK 

THE DOLLAR remained under . 
pressure on foreign exchanges 
yesterday despite the efforts of 
Ae Bank of Japan and some Eu- 
ropean central banks to steady 
the market's continuing unease 
over US economic policy. 

The market’s readiness to sell 
the dollar was evident by its re- 
action to a detailed restatement 
of West German monetary poli- 
cy of opposition to higher inter- 
est rates to West Germany and 
the US by Mr Karl Otto Poehl, 
the president of the West Ger- 
man central bank, the Bundes- 
bank. 

In an apparent reference to 
recent schemes suggested by Mr 
Nigel Lawson, the UK Chancel- 
lor of the Exchequer, and Mr 
James Baker, the US Treasury 
Secretary, Mr Poehl expressed 
scspticisD over the advisability 
of establishing formal target 
zones for currencies, or relying 
too much on commodify price 
movements as a guide to ex- 
change rate management. 

Despite intervention earlier 
to the day by the Bank of Japan, 

■the Bundesbank and Ae Swiss 
National Bank the dollar fell to 

ami the Swiss franc and to its 
lowest point apdnst the D-Mark 
since January 1980. 

On Wall Street the weakness 
undermined US bond prices for 
the first time since the dollar 
began its slide 10 days ago. 

Bonds had held up well until 
yesterday because of strong do- 
mestic demand. Although the 
dollar’s weakness could deter 
foreign investors at this week’s 
quarterly Treasury refunding, 
dealers remained optimistic of 
heavy buying by domestic inves- 
tors. 

Despite the concerns over the 
dollar equity markets contin- 
ued Ae trend of late last week 
with solid two-way trading in 


SLUGGISH economic g r owA in 
Wert Germany next year is Ukrty 
to lead to only a small reduction 
to the massive current account 
sarpflns, the countxy*s five lead- 
ing economics research Insti- 
tutes said. They urge Bonn to 
qpnr economic growth by bring- 
ing for w a r d Its controversial 
programme of tax cats, Page 28 

evidence. In Tokyo the Nikkei 
index gained 29.69 points to 
close at 2&35&60 ahead of to- 
day’s national holiday. 

New York investors treated 
stocks cautiously at Ae opening 
after Ae hammering equities 
received on the two previous 
Mondays. 

Trading volume subsided to 
normal levels for Ae first time 
in over two weeks. Institutional 
and retail investors were buy- 
ing selectively but most traders 
expected the market to remain 
quiet and relatively stable this 
week while Wall Street watched 
Washington’s progress on cut- 
ting the federal budget deficit 

The Dow Jones Industrial 
Average closed up 21X56 points 
at ^014.09 after sinking some 25 
points shortly after the opening 
NYSE volume was 176m shares. 
US exchanges are closing 90 
minutes early for Ae first three ‘ 
days of this week and an hour 
early Ae last two days. 

In London, Ae dollar closed 
at Y137.05 compared with 
Y13a35 on Friday, at $1,739 
($1,722) against the pound and 
at DM1.7120 CDML7280X In New 
York, it closed at Y136.95, at 
$1.74 against sterling and at 
DM1.7105. 


London Stock Exchange settle- 
ment day. Page 8; Poehl defend s 
monetary policy. Page 28; Mar- 
kets, Page 59 


Elders drops ambitious plans 
for international overhaul 


Jfits 


tar. said. 


1067 

theL75Llbn 
in 1988, Mrs 
the managing direc* 


BY STEVei BUTLER IN LONDON AND BRUCE JACQUES M SYDNEY 


ELDER’S IXL, the Australian 
brewing - agribusiness and fi- 
nance conglomerate which 
owns the Fosters brand, yester- 
day abandoned a complex Inter- 
national restructuring plan that 
would have involved large stock 
market offerings to London, 
Hong Kong and Sydney. 

Mr John Elliot, chairman, 
blamed the crash In world stock' 
markets for the withdrawal, to 
what was the first visible sign 
that high-flying Antipodean en- 
trepreneurs were being forced 
into retrenchment in the wake 
of the steep fall of share prices. 

The retrenchment leaves El- 
ders saddled wiA heavy debts - 
nearly A$3L2bn, compared to 
sh a r e h o lders’ fends reported at 
A$&5bn. Although Elders has a 
strong cash flow, it is unlikely to 
be able to proceed with ambi- 
tions -to acquire a ’ major US 
brewery, of which Mr Elliot had 
spoken. 

The announcement to Ade- 
laide last night just two 
dayx before shareholders were 
scheduled to vote on the pro 1 
posals that would have led to 


AFP Investments, that Aey sup- 
Ae decision to wiA- 
w. 

The 


share flotations in Hong Kong, 

Sydney and London. 

Flotation of the 5,000 public 

house estate of Courage, Ae UK The decision, which was 
brewer, has been cancelled, al- widely anticipated, comes after 
Aough the plan may be revived, a savage fell to Ae company’s 
possibly to a different form to- share price, from a high of 
volvtog private placement, A$SJM earlier In Ae year, to 
when conditions allow. Elders A$2.75 on Friday, although Ae 
said Ae float was _ltoked to shares recovered to A$3J5 to 
property values and interest yesterday’s rally, 
rates and that the division The steep fell to the Austra- 


would be run as a property 
group linked to Ae brewery. 

The restructuring was aimed 
at increasing Ae group's mar- 
ket capitalisation, and Mr Elliot 
said that the expected gains 
from Ae . flotations would now 
be insufficient to justify options 
to shareholders included in the 
plans of a A$1 per share capital 
return or a one-for-Gve bonus 
shareissue. 

Elders has some A$800m of 
outstanding convertible prefer- 
ence shares, and Aese will now 
have to be treated as debt since 
Ae conversion price is well 
above Ae cmxrent market 
price. 

Elders directors also said 


the restructuring of Elders into they had rece i ved indications 
three divisions - brewing; agn- from the company’s major 
business and finance Hus was shareholders, which include 
to. have been accomplished by Broken Hill Proprietary and 


lian market has raised ques- 
tions about other entre 
nears, including Mr Rol 
Holmes A’Court, whose Bell 
Group yesterday closed at 
A$3-10, compared to a high for 
the year of A$10.8a 
Mr Holmes A’Couxft position 
was considered especially vul- 
nerable because of the weak 
cash flow of his companies, 
which depend heavily on share 
plays for profits. Mr Holmes 
A’Court said to Perth yesterday, 
however, that Ae group had put 
together 'substantial* lines of 
credit in the past 12 months that 
would allow it to continue to 
pursue Its goals. Speculation 
has recently centred on wheA- 
er Mr Holmes A’Court would be 
forced to liquidate his substan- 
tial UK shareholdings in order 
to raise cash. 


•CONTENTS- 


Europe 

Companies. 

America. 


Editorial cmnMwt. 
EarrtMwto- 


-** 


Eue-Mtkus 




.49 


M 


Companies. 
Ove rs eas — 
Com panics 
World Trade w 
Britain — — 


.29- 

.4 


Gold. 


IifL Cfcyital Rackets . 
Letters — 

Lex. 


.88 


.a 




-28 


7 Hamgemert. 


.a 


.8-18 


Campanil 


Men ud Hatters, 
icy Markets. 


Agriculture.— 
Aits - Reviews — — 

World Guide - 

Cmmertial Law — 
Commodities _ — 
Crossword— — — - 


Currencies. 


<30 


— to 5 

>25 

.25 

Stock atsrketa- Bourses ~47,SI 

-Wan street— 47-Sp 

- Loodoa <Z-*7_SB - 

-M 

-38 

Technology — 

Unit Traffic 

—21 

44-43 . 

-40 

.39 

World Index 

4* 



ITALIANS 
RELUCTANT 
TO GRASP 
BUDGET 
NETTLE 


.Treasury Minister Glnliano Amatoy 
• who Is pressing for a 
mere austere finance bill. Page 2 


Africa: Senegal bows to shifting sands 
of monetarism 4 

Chicag o: Schools set out to reform 
their ways — 6 


Low Report: Reassurance follows Nor- 
wegian settlement — — 10 

Technology: Rude awakening for the 
dream factories - — — 21 

it Venture capitalists turn 
buyouts 22 

comment: Gorbachev’s social- 
ism: China's drive for reform — . — 28 

Foreign Affair s: Bolshevik Revolution 
- an empty anniversary - — — — — 27 

Lex: AB Foods; Elders; Orion 28 



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2 


Financial Times Tuesday November 3 1987 


EUROPEAN NEWS 


Bonn welcomes Soviet military inspection 


THE BONN Government has wel- 
comed the first Soviet "challenge in- 
spection" of military exercises on 
West German soil, saying it helped 
increase East-West trust, Reuter 
reports from Bonn. 

Moscow, «g<ng its right to shnrt- 
notice checks on exercises under an 
agreement by 35 nations in Stock- 
holm, sent four officers last week to 
US wargaxnes in southern West 
Germany, said the foreign ministry. 

It was the first Soviet c h al len ge 
inspection in West Germany, spar* 


eatly to check the declared sise of 

the manoeuvres. 

The Soviet officers' 48-hour tour 
followed visits to a series of war- 
games in West Germany this au- 
tumn by 170 observers from Nato, 
Warsaw Pact and neutral countries. 

The Soviet tour included the tiro 
large training bases of Grafenwo- 
ehr and Hahenfeb used by US and 
West German forces. 

Moscow announced the inspec- 
tion after the US had cut the num- 
ber of men taking part in the exer- 
cises from 13,400 to 11,650- Ibis is 


cn the borderline of wargames that 
must be reported but well below the 
17, 000-troop exercises to which ob- 
servers must be invited. 

It followed challenge inspections 
of Soviet wargames in August by 
US officers and of East German ex- 
ercises by Britain the same month. 
Moscow sent officers to inspect ma- 
noeuvres in Turkey in September. 

• US and Soviet negotiators on in- 
termediate-range nuclear forces . 
held two meetings yesterday, a US' 
spokesman said, in the resumed ef- 


forts to agree on a treaty before the 
scheduled s uper p o w er summit In 
December, AP reports Irani 
Geneva. 

'They're working flat put," US 
spokesman Mr Terry Shroeder 
aid. * 

President Ronald Reagan an- 
nounced ou Friday that the Soviet 
loader Mr Mikhail Gorbachev 
would arrive in Washington on De- 
cember 7 for a summit at which R 
was hoped an agreement to elimi- 
nate INF would be signed. 


Mr Reagan said foe remaining 
details to be resolved were “techni- 
caT but were important in ensuring 
against cheating on a treaty. 

Among foe issues still to be re- 
solved is whether Soviet monitors 
will be stationed at foe nuclear 
bases in West Germany, Britain, 
Italy and Belgium where foe US 
missiles are now stationed. 

Ifcere is a tentative agreement to 
permit US monitors at Soviet mis- 
sile sites, and foe JEremlm is Seek- 
ing reciprocity in Westeri Europe. ■ 


British designer alleges plagiarism over Messina tunnel 


BY JOHN WYLES IN ROME 

ITALY? TRANQUIL and barely 
perceptible progress towards decid- 
ing whether or not to join Sicily 
with the mainland by bridge or tun- 
nel has been jolted by a British con- 
sultant’s allegations of partiality 
and plagiarism. 

At the weekend, Mr Alan Grant 
took full page advertisements in 
eight Italian newspapers to tell the 
story of his 16-year battle to per- 
suade the authorities to adopt his 
design for a' tunnel across foe 
Straits of Messina. 

For most of the time he has 
looked likely to lose to foe lobby for 
a suspension bridge, but last week 


his ww fnf * was given an unexpected 
and apparently unwelcome boost 
when a consortium of state-owned 
companies produced a tu nnel de- 
sign which Mr Grant claims is, in 
all important respects, i de ntic a l to 
his own. 

Christened “Archimedes Bridge,” 
its virtue was first recognised in 
1969 when it was the only tunnel 
among six winning projects in a 
special competition for a link across 
foe straits. Mr Grant proposed a 
submerged concrete tunnel for car- 
rying road and rail traffic which 
would be anchored to the sea bed 
by a system of crossed cables. 


Mr Grant says that foe anchoring 
is his intellectual property right 
which is protected by patent He 
sold foe majority stake in the pa- 
tent some years ago to Mr Elio Ma- 
tacena, a ferry operator across foe 
Straits. 

Last week, Saipem, Snamproget- 
ti, Spea and Tecnomare- all compa- 
nies belonging to the two major 
Italian state holding groups, DU 
and ENI - unveiled a feasibility 
study for tm road and one sub- 
merged railway tunnels to be an- 
chored to foe seabed by cables. 
“They are promoting precisely my 
scheme,” Mr Grant said yesterday. 


Mr Grant said be bad taken out 
foe newspaper advertisements “to 
pot the facts to foe Italian public". 
Now approaching 65, he may not 
live to see the tunnels bmh but says 
he should have the recog niti o n for 
such a major project 

His advertisement dwelled at 
length with his ton gstandi-ng griev- 
ances against Straits of Mwwip* 
Spa, the state company set up to 
Twalra TPff pfflTngwH atirtpq 00 a fixed 
link. 

This is headed by Mr Gianfranco 
fSflawWni who was a fellow prize- 
winner in 1969 with a design for a 


suspension bridge wifo three spans. 

No comment was available yes- 
terday from foe companies sponsor- 
ing foe faiwfioi design, but Mr Guar- 
dim's company said that it would 
show that Mr Grant’s allegations 
were without foundati on "at the ap- 
p ropri ate time and place”. 

Mr Grant alleges that Mr Gflardi- 
ni has been reluctant to consider 
any alternative to a suspension 
bridge. He claims foe Straits of 
Messi na company issued a mislead- 
ing judgement on his design which 
in fact, been technically vali- 
dated by the Italian naval registra- 
tion agency. 


CGTPto 
join Lisbon 
economic 
board 

By Diana Sndfo in Lisbon 

PORTUGAL'S c om i wnnirt -domi- 
pi>m trade TT T >i ‘ i * |rt confederation, 
CGTP wOl for foe first time sit' on 
the Council of Social Co-ordin at i on , 
foe government prices and incomes 

authority. 

CGTP representatives took t heir 
seats yesterday at the Council's 
first meeting since the Ambd Cam- 
eo Silva centre-right gov ern m en t 
won a landslide In tile July 19 gen* 
gal election. 

Faring radically different eco- 
nomic and social conditions, in a di- 
mate where union mffita&cy and 
systematic industrial action have 
t ost m omentum in recent years, the 
CGTP wiB bargain with rather than 
confront leaders of 
agricultural and commerce confed- 
erations. 

The first round at bargaining 
may be tense. Ihe Government has 
set 6 pg cent as its 1988 inflation 
figure cm which, wage negotiations 
will be based, and announced a 6 
pg cent increese tar rivfl servants 
in 1988. 


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Italian cabinet 
reluctant to grasp 
the budget nettle 


BY JOHN WYLES MROtfE 

A GENERAL reluctance to as- 
sume responsibility for still 
more unpopular economic mea- 
sures is oetierilling the Italian 
Government’s highly unusual 
attempt to rewrite its 1989 bud- 
get proposal more than a month 
after its first public presenta- 
tion. 

At a time when the budget 
would normally be well into its 
parliamentary discussion, busi- 
ness and the markets are in to- 
tal uncertainty about the Gov- 
ernment's financial strategy. 

Meanwhile, Mr Giuliano Ama- 
to, the Socialist Treasury Minis- 
ter, is pressing Mr Giovanni 
Goria, the Christian Democrat 
Prime Minister, to lead the pre- 
sentation of a more austere Fi- 
nance Bill; the Prime Minister’s 
office was insisting yesterday 
that Mr Amato, together with 
the Finance and Budget Minis- 
ters, come up with proposals 
which mi ght justify such a 
move. 

The only hand apparently 
guiding the Government at the 
moment is that of Mr Bettino 
Craxi, the Socialist leader, who 
*1$ not part of it He wants the 
[credit for pushing the Govern- 
ment towards "sound policies” 
trot wants to avoid any fall-out 
which might seriously damage 
his party’s standing. 

The Senate's budget commit- 
tee decided on Saturday not to 
press ahead with its consider- 
ation of the original Finance 
,MU in a move which was under- 
stood to have been agreed be- 
[tween Mr Amato and the com- 
mittee chairman, the Christian 
Democrat Mr Nino Andreatta, 
an economist 'who favours a 
(sharp attack on public spend- 

ling..- 

Although obviously a sponsor 
of the 1888 Finance Bill, Mr 
Amato is known to have shared 
many of Mr Andreatta’s doubts 
about its chances of holding the 
public sector deficit steady at 
Lice 500bnC£50.5bn), let alone of 
bringing it down. 

Mr Amato was unhappy about 
various detailed changes made 
to the budget proposal by his 
•Christian democrat colleagues. 
Mr Antonio Gava, the Finance 
•Minister, and Mr Emilio Colom- 
,bo, the Budget Minister, while 
•he was attending the annual 
(meeting of the linternational 
Monetary Fund In Washington 
‘at the crad of September. 

The budget has also come mi- 
lder sustained and barely veiled 



Amato; passing the chalice 

criticism from the Bank of Italy 
for simultaneously fuelling in- 
nation by raising VAT rates by 
one percentage point and boost- 
ing domestic demand by adjust- 
ing tax rates on low and middle 
incomes. 

At the end of last week, the 
Bank forecast that in fl a tion 
would reach an annual rate of 6 
per cent by the end of the year 
and seemed highly dubious 
about the Government's budget 
estimate of a 4J> per cent annual 
rate in 1988. 

When and how the Govern- 
ment will respond to the new. 
situation is unclear. Mr Amato 
is justifying a rewritten budget 
proposal on the grounds that 
the turbulence in the markets 
in recent weeks points to lower 
growth in the US and the world 
economy next year. 

He is said to favour a budget 
deficit target of LlOO.OOObn, 
without yet indicating how it 
might be achieved. The Senate 
budget committee came up with 
suggested savings of L4,600bn, 
but leaving VAT rates un- 
changed would cost L4,75Qbn. 

A possible saving of L5,470bn 
could be found if direct tax 
rates are not altered and in- 
creases in family allowances 
are withheld. This would be 
bound to lead to a lest of 
strength with the trade unions 
which, although ihr from at the 
peak of their powers, could still 
be a match for a Government 
which appears anything but ro- 
bust 


French Socialists want 
arms report published 

BY PAUL BETTS IN PARIS 

THE French Socialist Parly yes- 
terday demanded publication of 
a confidential Defence Ministry 
report said to contain allega- 
tions of the party's involvement 
in illegal arms sales to Iran. 

Disclosures about the report 
by two news magazines at the 
weekend have provoked a new 
political storm in France barely 
six months before the presiden- 
tial elections. 

The party yesterday again vig- 
orously denied any involvement 
in the illegal arms sales to Iran 
by the Luchaire company be- 
tween 1963 and 1966. It said the 
allegations were part of a politi- 
cal campaign to try to discredit 
the Socialists in the run-up to 
the elections. 

It also asked for the report to 
be published and said that it 
would question Mr Andre Gi- 
raud, the Defence Minister, 
about the affair in the National 
Assembly. 


Mr Jean-Jacques Queyrsnne. 
the Socialists’ spokesman, also 
denied that the party had re- 
ceived any financial contribu- 
tions in connection with the 
arms sales, as implied in the 
magazine articles. 

The controversy is expected 
to worsen tensions between 
right and left in France already 
exacerbated by a string of re- 
cent political scandals Involv- 
ing both the parliamentary ma- 
jority and the opposition. 

The affair coincides with a 
sharp decline in French de- 
fence export orders. Although 
France last year remained the 
world’s third largest arms ex- 
porter after the US and the So- 
viet Union, orders declined to 
FFr23.5bu(2JSbn) last year from 
FFr44J5bn the year before and 
FFrfJLSbn in 1984. New orders 
in the first half of this year to- 
talled only FFrflBbn. 


East and West agree on 
new troops cut forum 


BY JUDY DEMPSEY IN VIENNA 

(NATO and Warsaw Pact mem- 
ber countries which are holding 
Informal meetings on how to 
give Impetus to the reduction of 
conventional forces in Europe 
have agreed in principle to start 
formal negotiations next year. 

. During a lengthy meeting of 
■the 23 countries yesterday both 
sides accepted that negotiations 
should begin in 1988 but fixed 
'no precise time or venae. 

The negotiations will take 
place within the framework of 
the Conference on Security and 
Co-operation in Europe (CSCE). 
'Which consists of the 35 coun- 
: tries of Eastern and Western 
Europe (bar Albania), the Sovi- 
et Union, the United States and 
■Canada. 

They will require a mandate 
(from the CSCE before they can 
'begin formally and will not di- 
rectly involve the neutral and 
non-aligned countries. They 
will be regularly Informed on 
their progress, however. 

Progress has been steady 
since the two sides began hold- 
ing informal meetings last Feb- 
ruary to consider new ways of 
reducing conventional forces in 
Europe. But two significant 
stumbling blocks still stand in 
the way of a speedy agreement 
on a draft mandate. The first 
concerns the scope of the new 
negotiations. 

In a draft plan presented in 
June the Warsaw Pact it pro- 
posed that short-range nuclear 
weapons and some tactical avia- 
tion systems be covered in the 
new forum. During the meet- 
ings. Nato has insisted that the 
talks focus on conventional 
forces alone. 

"If there is one thing which 
will slow us down, it will be this 


crucial difference in whi 



the venue itself The Austria! 
in particular are lobbying ene 
getically for the talks, whit 
will also include a special met 
ing on military confidenc 
building measures, to be held i 
Vienna. At the moment, tl 
Austrian is hosting a major fc 
low-up meeting or the Helslh 
Final Act 

The French, however are o 
posing such a plan on tl 
grounds that Vienna might b 
come a "headquarters" for ai 
future CSCE arms negotiation 
French diplomats also atgi 
that since the deadlocked Mut 
si and Balanced Force Redu 
Cion talks have been meeting f 
14 years in Vienna, any new f 
rum in the city would be cc 
oured by the sense of failure i 
the those talks. 


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3 


Kia«- % ■ 

' ‘-vnv 


financial Times Tuesday November 3 1987 


UleM 
a §ra Sp 
nettle 






ists wai: 
ubiishi: 


I uiire^ 
l foruft 


SEVENTY YEARS OF THE SOVIET REVOLUTION 

hat journalists rather than poets are in the vanguard of intellectual change 

:ntsia learn to think in a modern world 


THE Soviet intelligentsia 
greeted the election of Mr Nit 
hail Gorbachev as leader in 
1985 with apathy and cynicism. 
Many foresaw a bleak fixture 
dominated by "Brezbnevism 
without Brezhnev." 

' It was only towards the end of 
last year that intellectuals in 
Moscow began to appreciate 
that greater freedom of, expres- 
sion had come to stay and. that 
Soviet political and cultural li/e 
was going through its most pro- 
found change since 1917.' 

There was an outpouring of 
books, plays and film? hitherto 
censored: Repentance, a film by 
the Georgian director Abuladze' 
loosely based on the life of Ben- 
ia, the head of the secret police 
dining the later years of Stalin, 
was shown in cinemas through- 
out Moscow. 

Earlier this year.The Chil- 
dren of the Arbat, an historical" 
novel by Anatoly Rybakov about 
Soviet society and tbe terror, in 
the Thirties, was published al- 1 
most 20 years after it was' writ- 


ten. In 1988- the magazine 
Oktyabr will start serialising 
the hovel Life and Fate by Vasi- 
ly Grossman in which the action' 
takes place during the battle of 
Stalingrad but deals with previ- 
ously forbidden topics such as 
anti-semitism and torture in So- 
viet prisons. • 

The publication of Gross- 
man’s book indicates how free- 
dom-of literary expression has 
now moved far beyond the lim- 
its allowed under Khrushchev. 
When Grossman first tried to 
publish it in 1961, at a time 
when Khrushchev was at the. 
height of his power, the KGB se- 
curity police came to his apart- 
ment and confiscated ■ every 
manuscript copy of the book 
they could find. 

Not surprisingly intellectuals 
rallied to Mr Gorbachev 
throughout last year. Mr Alex- 
ander Yakovlev, party secretary 
for propaganda and culture, 
backed; changes in the leader- 
ship of the writers, film and the- 
atrical unions and largely end- 
ed censorship. Radical editors 


were appointed to reanimate' 
moribund magazines such as 
Ogonyok and Moscow NeWs. 

The backing of the intelligen- 
tsia for Ur Gorbachev’s reforms 
is important because the Com- 
munist Party’s own ability to in- 
fluence public opinion had 
withered steadily during the 
Seventies and early Eighties. 
The -official- representatives of 
, Soviet culture neatly demon- 
strated their intellectual bank- 
ruptcy by the award of the coun- 
try’s top literary prize to 
President Leonid Brezhnev for 
his memoirs in 197ft 

Today the atmosphere is very 
different The dissident opin- 
ions of 1985 are now the parly 
line. Academics who previously 
toned down heretical opinions 
for publication in small circula- 
tion journals now find them- 
selves writing for Izvestia and 
Pravda. ■ 

In many respects the present 
intellectual atmosphere In the 
Soviet Union resembles the 
1960s in Western Europe and 
the US. The mould which 


BY OUR MOSCOW CORRESPONDENT 

THE CENTRAL theme of yesterday’s speech 
by Mr Mikhail Gorbachev was an effort to 
close a chanter in Soviet history by saying that 
Soviet society needed to break with- tbe au- 
thoritarian tradition developed in the Stalin 
and Brezhnev years and ran its affairs in a 
new and more democratic way. 

His attack on authoritarian political and 
economic control was sustained throngbont 
his tbree-henr address, as he spoke of Soviet 
history, present political and economic re- 
toms and foreign policy. 

Another key element in the speech was the 
presentation of perestroika (restructuring) as 
the necessary culmination of the way the Sovi- 
et Union has developed ever the past 79 years, 
and the ftrifilment of ite ortginal ideals. 

Although seme Soviet intellectuals and for- 
eign observers see the faflura to. rehabilitate 
Nikolai Bukharin and other victims of the 
purges as a sign of conservatism, the sub- 
stance of the address, although lacking dra- 
matic flourishes, is extremely radical. 

Overall, Mr Gorbachev Med to as 

well as condemn Stalinism and the type of au- 
tocratic state and tightly controlled society 
which Stalin bequeathed to Mr Nikita 
Khrushchev and Mr Leonid Brezhnev. But his 
condemnation of Stalinism was still pro- 
nounced and likely to be influential in a coun- 
try which takes its ideology seriously. 

In his examination of Soviet history in the 
years since the Bolsheviks took power In 1917, 
Mr Gor bach ev was at pains to emphasise that 
flexibility in doctrine and action, depending 
on circumstances, was essential to Lenin’s 
success. 

Clearly he does not want Usee his economic 
and political, reforms attacked a*. selling oat 
Socialist traditions.. He has therefore tried to : 
strike a balance between admitting mistakes " 
and . 

centuries to accomplish." 

Not surprisingly, he found many l e s s ons In 
Soviet history supporting- present policies. ' 
For instance, he pnised the New Economic 
Policy of 1931-19CS9 initiated by Lenin to allow • 
individual labour and co-operatives to engage 
in free trade, while heavy industry remained 
in the bands of the statei 

His attack on collectivisation of agricul- 
ture, the expropriation of the peasantry by 
Stalin storting in 1989, was stranger, and his 
condemnation of Stalin in later years more 
moderate, than had been expected. Trotsky, 
second, to Lenin daring the Revolution and 
civil war, was condemned and Nikolai Buk- 
harin given ambivalent praise. 

By the end of the 1939s, Mr Gorbachev said, 
the Soviet Union had raised its industrial out- 
put above any country in Europe, bnt at high 
cost: "People had begun to believe in the nnl- 
vmsal effectiveness of rigid centralisation.” * 

This militarisation of society, everybody 
acting on command from above, was boo s t e d 
by the way the eoamtiy was indnstarlaUseffand 
agriculture collectivised. "An atmosphere of 
intolerance, hostility and suspicion was cre- 
ated in the country,” Mr Gorbachev said. 

Speaking of Stalin and the great purges of 
1937 and 1938, as well as plots and conspira- 
cies fabricated after the war, Mr Gorbachev - 
■ said: It Is sometimes said that Stalin did not 
know of many instances of lawlessness. Been* 
ments at our disposal show that this is not so. 
The guilt of Stalin and his immediate entou- 
rage before the party and the people for the 


wholesale repressive measures and acts of 
lawlessness to enormous and unforgiveoble.* 

The rehabilitation of victims of the purges 
had been suspended In the mid-99s, but the 
potithuro had decided to set np a commission 
to deal with old cases. A new history of the 
8ovtot Communist Party Is to he written. 

Speaking of Mr Khrushchev, Soviet leader 
from 1954 to 1964, Mr Gorbachev said: The 
failures of the reforms undertaken in that pe- 
riod were ffaiy due to the fact that they 
were not backed by a broad development of 
democra cy." 

It.was this. Mr Gorbachev said, which made 
perestroika different. In the final years of Mr 
Brezhnev progress was “largely hampered by 
an addiction . to habitual formulas' and 
schemes." The country had to break with this. 

"The democratisati on of society Is at the 
cose of perestr oi ka," Mr Gorbachev said, while 
admitting that people were "Still timid, act ir- 
resolutely, fear responsibility, and are stifl in 
the grip of obsolete rales and instructions.' 
He blamed lack of democracy for bureaucracy 
and abuse of power, worship of rank, waste 
and irresponsibility. 

Diversity of opinion was central to democra- 
cy, and democracy central to the success of 
economic reform, he said. Indeed, one of the 
most interesting aspects of Iris speech was the 
way. in which he blamed the centralised com- 
mand system of running the economy as the 
root cause of such political failing * as lack of 
democracy and growth of the bnraaaency. 

He said the first stage of perestroika - ana- 
lysing what was wrong and changing people’s 
attitudes - was ever. There were also the be- 
ginnings of economic improvement, he said, 
underlining this by announcing tint foe har- 
vest this year surpassed last year’s 219m 
tomes, despite wet weather. 

He next twrf or perhaps three yean will be 
Mzticnlapdy complicated, decisive and in a 
Mr Gorbachev said. The real 
•ti M ll ra l ty jJ m Implied, was that reforms had to 
be carried out simultaneously in all areas, at 
the same time as the party, in charge of imple- 
menting reforms, was Itself being reformed. 

Here Mr Gorbachev made what appeared to 
be a carefully balanced side swipe at both con- 
servatives and radicals within the party. He 
said conservatives would never say they op- 
posed perestroika, hot "they would have ns be- 
lieve they are fighting against negative side- 
effects." 

And then, la what was evidently a reference 
to the offer by Mr Boris Yeltsin, the Moscow 
party chief; to resign in frustration at top-lev- 
el resistance to change, Mr Gorbachev said: 
"Nor should we succumb to the pressure of the 
oyerly jealous and impatient - those who re- 
fuse to accept tbe objective logic of perestroi- 
ka.* 

lathe second half of his speech, on foreign 
policy and tire feture of Communism, Mr Gor- 
bachev oonnded assertive and confident. On 
negotiations on unclear arms rednetious with 
the UB he added nothing new, but did say the 
Soviet Union had success in "destroying the 
stereotypes of anti-Sovietism and dispelling 
distrust of our initiatives and actions.* 

. On relations with other Communist parties, 
he said that all were completely and irrevers- 
ibly independent, adding that this had been 
asserted in 1956 but, in what could be a refer- 
ence to the invasion of Czechoslovakia in 1968, 
added: "Old habits were not discarded at 
once." 

. Editorial comment. Page 24 


Years of tragedy and triumph 


THE FOLLOWING are key ex- 
cerpts from Mr Gorbachev's 
speech: 

Stalin - Industrialisation, Col- 
lectivisation, Purges. 

"A conviction had arisen that 
all problems could be solved at 
a stroke, overnight Whole re- 
gions and parts of the country 
began to compete: who would 
achieve complete collectivisa- 
tion more quickly? Arbitrary 
percentage targets were issued 
from above. Flagrant violations 
of tbe principles of collectivisa- 
tion occurred everywhere. 

"Nor were excesses avoided 
in the struggle against the Ku- 
laks. The basically correct poli- 
cy of fi ghting the Eulaks was of- 
ten interpreted so broadly that 
it swept in a considerable part ■ 
of the middle peasantry too — 

"But, comrades, if we assess 
the significance of collect! visa- - 
tion as a whole In con solid ating 
Socialism in the countryside, it 
was in the final analysis a trans- 
formation of fundamental im- 
portance.. „ „ 

*1 am putting things bluntly - 
those were real crimes stem- 
ming from- an abuse of power. 
Many thousands of people in- 
side and outside the party were 
subjected to wholesale repres- 
sive measures. Sudh, comrades, 
is the bitter truth _ - .. 

Rehabilitation of Stalin’s Vic- 
tims. ... . 

"We now know that the politi- 
cal .accusations and repressive, 
measures against a number of 
party leaders and statesmen, 
against many comm uniH ts and 
non-party people, against eco- 


nomic executives and- military 
men, against scientists and cul- 
tural personalities, were a re- 
sult of deliberate falsification _ 

’But the process of restoring 
justice was not seen through to 
the end and - was actually 
suspended in the middle of the 
Sixties. Now, in line with a deci- 
sion taken by the October 1987 
plenary meeting of the Central 
Committee, we are having to re- 
turn to this." 

Second World War. 

The Western ruling circles, in 
an attempt to blot out their own 
sins, are trying to convince peo- 
ple that the Nazi attack on Po- 
land and thereby the start of the 
Second World War was trig- 
gered by the Soviet-German 
non-aggression pact of August 
23,1839. 

"As if there had been no Mu-; 
nich Agreement with Hitler 
signed by Britain and France 
back in 3838, with the active- 
.connivance of the US, no An- 
schluss of Austria, no crucifix- 
ion of the Spanish Republic, no 
Nazi occupation of Czechoslo- 
vakia, tmd no conclusion of 
non-aggression pacts with Ger- 
many by London and Paris in 
1938 ~ 

Post-War Yean and Transition, 
to Gorbachev. 

"Abuses of power and viola- 
tions of socialist legality confine 
ued. The "Leningrad Case* and 
the Doctors’ Case’ were fabri- 
cated. „ Xn short, there was a 
deficit of genuine respect for 
the people. _ 

"It required no sm al l courage 
of the party and its leadership. 


headed, by Nikita Khrushchev, 
to criticise the personality cult 
and its consequences, and to 
re-establish Socialist legality. 

"At the October 1984 plenary 
meeting ot the- party Central 
Committee there was a change 
of the leadership of the party 
and the country, and decisions 
were taken to overcome volun- 
taristic tendencies and distor- 
tions in domestic and foreign 
policies-. 

In the first few years this 
changed the situation in the 
country for the better. _ The 
country had at its disposal ex- 
tensive resources for further ac- 
celerating its development But 
to utilise these resources and 
put them to work, cardinal new 
changes were needed in society 
and, of course, the correspond- 
ing political wilt There was a 
shortage of the one and the oth- 
er." 

Reform under Gorbachev. 

Two key problems of the de- 
velopment of society determine 


the democratisati on of all so- 
cial life and a radical economic 
reform.- 

"But it would be a mistake to 
take no notice of a certain in- 
crease in the resistance of the 
conservative forces that see per- 
e*trp*ka simply as a threat to 
their selfish Interests and ob- 
jectives. This resistance can be 
frit. not only at management lev- 
el but also in work collectives. 

"Perestroika carries on the rev- 
olutionary cause, and today Ills 
absolutely essential to master 
the skill, of exercising revolu- 
tionary self-restraint" 


shaped Soviet society In the 
1830s is breaking lip and a new 
and highly educated generation 
is I oo tong for fresh ideas on how 
they and their society should 
live. 

Unfortunately, despite the op- 
portunities given by glasnost 
(openess), the old intelligentsia 
have proved largely incapable 
of providing new ideas'to cope 
with present problems. 

Mr Boris Kagarlitsky, one of a 
new generation of Soviet critics, 
speaking of changes in the intel- 
ligentsia in 1986-87, writes of 


Gorbachev seeks to close long 
chapter in his country’s history 

RV mm urvimai ronoPCDOunniT • 


pable of any constructive initia- 
tive of its own, preferring just to 

applaud Gorbachev’s deci- 
sions.” 

He says that among the repre- 
sentatives of "high culture” tbe 
ideas of the Sixties predomi- 
nate, adding: "Tbe fashionable 
books published in 1988 (Raspu- 
tin’s Eire, Astafyev's The Dole- 
fill Detective, Aitmatov’s The 
Executioner's Block) bear wit- 
ness not only to the disappear- 
ance of many censorship re- 
strictions but also to the decline 
of analytic thought” 

The central reason for this is 
that many Soviet intellectuals 
remain as rooted in the 1950s as 
the former leadership. Writers 
debate how long the present 
thaw will last anahow many vic- 
tims of the purges will be reha- 
bilitated. 

But for the younger genera- 
tion - and the Soviet generation 
gap Is much greater than in the 
West in the 1960s - destabilisa- 
tion Is not enough. Reflecting 
on the impact of the present his- 
torical debate on Soviet youth, 
Mr Mikhail Getter, one of the 
Soviet Union's most perceptive 
historians, asks: "Should we car- 
ry the picture of Khrushchev 
and trample that of Stalin? 
They will never believe us, they- 
will reftise to listen to ns." 

Such sentiments are in keep- 
ing with tire present mood of so- 
cial, historical and political 
self-appraisal Historical ar- 
chives previously under lock* 


and key are being opened up. 
Sociologists examine the way 
Soviet society actually works as 
opposed to now it is meant to- 
work. Opinion polls show what 
people actually believe rather 
titan what the Government 
would them to believe. 

Some of the conversions of 
previous upholders of ortho- 
doxy to the new way of thinking 
have been too Cast to be con- 
vincing. Nothing, said a Soviet 
commentator on television last 
year, is more repulsive than 
"collective recovery of eyesight?’. 

But overall the current intel- 
lectual changes run far deeper 
than under Khrushchev. There 
are three main reasons for this: 
a much wider range of publica- 
tions are involved; almost every 
Soviet household has a televi- 
sion so changes in the media 
have far greater impact impact 
on public opinion; above all the 
spread of higher education 
means that there is a much 
more active and well-informed 
public opinion looking for new 
ideas. 

Again in contrast to the thaw 
under Khrushchev, it is journal- 


nost. But for most of tbe' 283m 
Soviet citizens new discussion 
programmes, documentaries 
and phone-ins on television 
have had a greater impact than 
articles in the press. 

A youth programme such as 
The Twelfth Floor has an audi- 
ence of up to 100m according to 
official figures. Last Monday, 
for instance, a large part of the 
adult population watched a doc- 
umentary called Risk on the de- 
velopment of nuclear weapons 
including criticism of Stalin 
■and footage of Khrushchev. Mr 
Gorbachev is the first Soviet 
leader who knows how to use 
television. 

Underpinning these changes 
in the intelligentsia and the me- 
dia is an enormous shift in edu- 
cational levels and the social 
composition of the USSR Stalin 
and Khrushchev ruled a land 
still dominated by the village. 

At the same time higher edu- 
cation has produced a much lar- 
ger and more sophisticated 
mass audience for magazines 
such as Ogonyok, newspapers 
such as Izvestia (much more 
avant garde than Pravda) and 



Mr Gorbachev pictured yesterday during his speech marking the 
70th anniversary of tbe Bolshevik revolution. 


The dissident opinions of 1985 are now the party 
line. Academics who previously toned down 
heretical opinions for publication in small 
circulation journals now find themselves writing for 
Izvestia ana Pravda. In many respects the 
intellectual atmosphere in the Soviet Union today 
.resembles the 1966s in Western Europe and the US 


ists catering' for a mass audi- 
ence not novelists and poets 
writing for an elite who are now 
in the vanguard of intellectual 
change. 

"Now literature seems to have 
stepped aside,” wrote Mr Sergei 
Baruzhdin, the editor of a liter- 
ary magazine, recently, "with 
the exception of- Jour nalist s at- 
tacking current and potential 
opponents of perestroika (res- 
tructuring) rather than past 
shortcomings." 

Western observers of the So- 
viet Union have tended to con- 
centrate on changes In the press 
as the central feature in glas- 


television programmes such as 
The Twelfth Floor/ To win read- 
ers and viewers the Soviet me- 
dia now has to compete hard in 
a way that it did not before. 

This social revolution is the 
real basis for the Gorbachev re- 
forms. According to Dr Vilen 
Ivanov, director of the sociolog- 
ical institute in Moscow, the 
main feature of thin revolution 
is a rapid increase in the num- 
ber of people with higher edu- 
cation, professional and mana- 
gerial groups who now make up 


As this group has grown, the 
number of peasants has 


dropped sharply and the work- 
ing class has remained static as 
a proportion of the population. 

These social changes have al- 
so had an impact on the position 
of Soviet intellectuals. They are 
no longer the preservers of cul- 
ture in a semi-literate country. 
Ironically their influence is 
therefore likely to diminish at 
the very - moment when they 
have largely obtained the free- 
dom of e x pression denied them 
for so long 

Largely but not entirely. 
There are, for instance, still no 
wholly independent publishing 
houses. When Josip Brodsky, 
exiled Soviet poet, won tbe No- 
bel prize for literature* this 
month, poets In the capital were 
still noticeably glancing over 
their shoulder to discover the 
party line on the award before 
welcoming it 

On the other hand there is no 
sign of Russians losing their ap- 
petite for large doses of culture. 
In one packed Moscow theatre 
last month the audience 
watched a four-hour perfor- 
mance of Chekhov’s Uncle Van- 
ya in Lithuanian (with simulta- 
neous translation into Russian), 
at the end of which the director 
invited the audience to join in a 
discussion of the play. 

But the most interesting intel- 
lectual changes in the Soviet 
Union today are in mass rather 


than elite culture: the transfor- 
mation of the mass media, the 
creation of informal groups and 
societies and the development 
of a public opinion with its own 
institutions. 

In the past intellectuals in 
Moscow owed some of their in- 
fluence to the degree to which 
the rest of Soviet society, in- 
cluding most of tbe Communist 
Party, had become not just muz- 
zled but depoliticised. Talk in 
the West about conflict between 
opponents and protagonists of 
Mr Gorbachev’s reforms often 
misses the significance of the 
dog which does not bark in the 
night, that too often perestroika 
provokes neither conflict nor 
debate but apathy. 

Society is now becoming poli- 
ticised again, but nobody knows 
bow far the process will go or 
the future political shape of the 
country. Mr Grigory Pelman, a 
sociologist who is head of a po- 
litical club in Moscow, says:- 
Tbe question is not of people 
opposing perestroika but of 
workers and peasants remain- 
ingpassive observers." 

As this passivity ends, assum- 
ing it does end, then it will re- 
duce the role of the Communist 
Party and, ironically, of the in- 
tellectual elite, both of which in 
the past have owed part of their 
influence to substituting them- 
selves for the rest of society. 


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OVERSEAS NEWS 


India urged by neighbours to change nuclear policy 


BY JOHN ELLIOTT IN KATMANDU 


FOUR SOUTH Asian countries 
yesterday indirectly called on 
India to change its policy on no- 
clear weapons and on the devel- 
opment of the Himalayan moun- 
tain tmtapped water resources 
in the interests of all the coun- 
tries of the region. 

Ur Mohammad Khan Junejo, 
Prime Minister of Pakistan, 
called at the opening session of 
the third annual summit of the 
South Asian Association forRe- 


He was backed to King JIgme 
Wangchuck of Bhutan, who 
called on the association to take 
a "united stand” against nuclear 
weapon development in South 
Asia and to conduct a "meaning- 
ful dialogue-. 


tdonal Co-operation in Nepal 
for it to develop a regional 
agreement on a "comprehensive 
tun on nuclear explosion tests". 
He also proposed a "binding in- 
strument" jointly renunciating 


With a population of about lm, 
Bhutan is the smallest member 
of SAARC and it rarely speaks 
out against India which broadly' 
controls its foreign policy. 


it is particularly concerned 
about the nuclear capability of 
zts larger neighbour, China. 

Pakistan is assumed to India 
and other countries to be on the 
brink of achieving a nuclear 
weapons -capability. India ex- 
ploded what it called a peaceful 
nuclear device in the early 
1970s and it is suspected to be 
reactivating its programme be- 
cause of Pakistan's develop- 
ments. 


President Hussein Brshad of 


a Multi-purpose Himalayan Wa- 
ter Development Plan covering 


flood control, irrigation, naviga- 
tion, hydro-electric power gen- 


uon, hydro-electric power gen- 
eration, urban water supply and 
other issues. 


India has been refusing pro- 
posals from Pakistan for a bilat- 
eral agreement between the two 
countries on nuclear non-prolif- 
eration, partly because it be- 
lieves this is a wider issue and 


The issue of Himalayan water 
power is sensitive because In- 
dia has been refusing till re- 
cently to talk jointly to its two 
neighbours most concerned, 
Bangladesh and Nepal. 


By using the summit to pursue 

these issues jointly the finer 
countries were confirming In- 
dia’s suspicion when SAARC 
was founded two years ago that' 
the smaller countries would at 
some time combine against U. 

• The Dalai Lama’s official 
representative In Nepal has 
been arrested during security 
operations mounted by the Ne- 


palese Government which tears 

Tibetans and other regional 
groups might disrupt the 
current third annual summit of 
South Asian countries in Kat- 
mandu. 

Anxious to impress the visit- 
ing leaders from neighbouring 
countries. King Birendra Shah 
■Dev of Nepal, who rules the 


country through a consultative 
form of parliament, has also or- 
dered that the Himalayan tour- 
ist haven of Katmandu be 
cleaned up. 

Cycle rickshaws, along with 
old public transport buses, have 
been banned from the streets. 

The Government is worried 


that activists involved in one of 
the region's internal conflicts, 
including Tamils torn Sri lanka, 
Sikhs from India, or refugees 
from neighbouring Tibet who 
have their headquarters in In- 
dia, might stage demonstrations 
or acts of terrorism during the 
three-day summit which opened 

days ago Mr Paljnr 
Thezinft who represents the Da- 
lai T fwa in Nepal and head* a 
Tibetan Welfare Office in Kat- 
mandu, was arrested along with 
five other prominent Tibetan 
refugees. Fellow Tibetans ex- 
pect them to be related on 
terarsday after the visiting 
beads of state have left. 



number of wives a good Muslim 
should have and he will give 
you the same answers his great 
grandfather would have given. 

Question him on money mat- 
ters and sound government, 
however, and the dipper is on 
the other foot - be is as 
up-to-date abont economic re- 
form and state disengagement 
as any monetarist on either side 
of the Atlantic. 

Senegal economic practice, 
like the arid Sahel landscape, is 
undergoing rapid transforma- 
tion. Where one is being 
changed to the relentless 
southward advance of die Sa- 
hara, the other, just as inevita- 


bly, is being remoulded by the 
pressures of a changing world 
economic order. Mr Sy may be 
traditional In dress, but as di- 
rector of the newly-formed 
Commission for State Disen- 
gagement In Senegal he stands 
at the forefront of those 
changes. 


the most ambitious in the Third 
World. 

The challenges it faces in re- 
vitalising the economy are con- 
siderable. In domestic terms 
Senegal still relies on the tradi- 
tional mainstays or millet culti- 
vation and cattle raising, both 
hard hit in recent years by the 
drought in the Sahel. 

For export earnings it de- 
pends chiefly on groundnuts 
and phosphates, commodities 
whose world prices stand at 
all-time lows. Its 23% rote of 
growth in gross domestic prod- 
uct is one of the lowest in Afri- 
ca. With a 1985 per capita in- 
come of $370 - in real terms 
lower than in 1960 - Senegal has 
a long way to climb back to eco- 
nomic health. 

Lack of agricultural and min- 
eral potential, however, is coun- 
terbalanced by the country’s po- 
Utical maturity. The former 
administrative hub of French 
West Africa, It had well-devel- 


dence. 

Today the fhvottr it finds in 
the eyes of Western countries 
and financial institutions is due 
largely to its adherence to 
French democratic principles. 
With a free press, active trade 
unions, regular elections, and 
no fewer than 16 political par- 
ties, Senegal is the only demo- 
cratic multi-party state in Afri- 
ca. 

France’s greatest gift to Sene- 
gal, however, has also been one 
of its curses. The gallic republi- 
canism inherited at indepen- 
dence in 1960 brought with it a 
massive civil administration 
and the ethic that the state had 
a preponderant role in the life 
of every citizen. 

With little private capital and 
none of the «wa«ie«i structures 
necessary for Investment, Sene- 
gal in 1900 had little choice but 
to embark upon a programme of 
state intervention, investment 

and subsidy 


and industrial enterprises on 
the strength of high world 
prices for its phosphates. When 
the market fell we were left 
holding babies we simply 
couldn't afford. We are still pay- 
ing for them now, mostly with 
crediL- 

Today the Senegalese paras- 
tatal sector consists of 62 wholly 
or majority-owned enterprises 
and 24 public agencies. In addi- 
tion, the state holds an indirect 
stake in 46 companies, mostly 

thrftwgh Hi* h awking ■yatem. 

The cost of these enterprises 
is too heavy for the Government 


Ea id on uvrivua 

Senegalese recognition that 
its public sector is over-extend- 
ed dates from I960, when it ini- 
tiated its first economic liberal- 
isation programme. Following 
t»ifc» with the International 
Monetary Fond and the World 
Bank in 1965, however, the Gov- 
ernment has accelerated its dis- 


engagement programme and 
made. the. promotion of the pri- 
vate sector one of its key struc- 
tural adjustment policies. 

As one of the conditions for 
the second tranche of a stuctur- 
al adjustment loan totalling 
SDR40m, tiie Commission for 
State Disengagement this Octo- 
ber announced the sale of its 
shares in 10 "mixed" enterprises 
- companies in which ' the state 
has partial and in some cases 
majority holdings. The Govern- 
ment will continue to hold mi- 
nority shares in four of the com- 
panies, but six will be totally 


to bear. Capital participation in 
parastatala totals more than 
35bn CFA francs (£70m) and ex- 
ceeds 299b of the government’s 
fixed capital. In 1965 parastatal 
losses were CEA35m and subsi- 
dies almost CFASOm. For a 
country that each year com- 


Head Office: 
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WINDHOEK 

ZURICH ‘ 



Taiwan sees 
queues for 
China visits 


By Bob King In Taipei 


; fi: inTVi u;ri; jtti'Ii 


In Taiwan pecked the office* ■ 
the Bed Craaa yesterday an the 
organisation began la accept 
appUcatioas for the -first per- 
nutted visit* to China, in SS 


years. 

*■ Qaeafet ; ■"•fj ' wppHcaats 


waiting since Sam for the Bed 
Grass elllees ta epeau The Tai- 
wan Gover nme nt, ka a Ug re- 
versal of policy an contacts 


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Dresdner Bank 

Batik with imagination 


there. It retailed, however, 
that residents who wish la 
trod la China register with 
the Taiwan Bed Cross. 

In feet, many have already 
returned cbadestlnely to Chi- 
na In recent 


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f f • • ! ■ T " f ! H 

eeScssm 




Gadaffi pulls 
out of Arab 
summit meeting 


BV RICHARD JOHNS 


may be 100% foreign-own ed, 
special incentives will be of- 
fered to companies in which 
there are majority Senegalese 
holdings. 

The 20 companies concerned 
are in the automotive, tight in- 
dustry, construction, hotelery, 
advertising and tourism sectors. 
They were chosen primarily for 
their saleability aim Include six 
out of the TO companies in Sea- 
gal with a turnover of more than 
CFAlbn. The - automotive 
group3eriiet Senegal, for ex- 
ample, is the largest in the 
country. The hotels slated for 
total divestment - the Meridiem, 
the Teraoga. and the Club Medi- 


C0L0NEL Muammer Gadaffi of 
Libya will not attend the Arab sum- 
mit u di ffh i H to begin in Amman, 
Jor dan, next Sunday, it was an- 
nounced in Tripoli yesterday. 

He told that the convening of the 
meeting had been “dictated by Am- 
erica specifically to com- 

bat Iran and to defend, American in- 
terests in the Gulf.” 

It was not clear whether or not he 
would send representatives In the 
meeting at which most of the 
members of the Arab League hope 
to rally su p port behind Iraq, to the 
Gulf conflict 

061 Gadaffi ssid he wanted an 
end to the Gulf conflict but saw as 
the priority a conference of Arab 
leaders concentrating on "combat- 
ting America, boycotting France, 
the liberation of Palestine, the ore*- 
tion of an Arab federation... and 
building an Arab atombic bomb.” 

Any decision by the volatile Liby- 
an leader to absent himself from 
the meeting could have been 

prompted by concern about Internal 

security. Western and Arab diplo- 
mats suggested last night They al- 
so expressed tbe belief that the pro- 
ceedings could only be made 
smoother by his ahsens* 

The annwincement however, em- 
phasised the difficulties the confer- 
ence would face in reaching unan- 
imity - the basis for resolutions at 
such g ath e rin gs - on a common 
stand against Iran or agreement on 
a joint approach to an international 


con fe rence on the central Arab-3s- 
radi conflict, the other baric issue 
confronting the beads of state; 

For King Hussein of Jordan, host 
of tbe m reHag . tbe willingness of 
Syria to be represented - presu- 
mably by President Hafez at Assad 
in person - would far outweigh any 

rebuff by the maverick Libyan lead- 
er who is only lost edging out of 
diplomatic isolation through his 
rapprochement with T unisia and 
Algeria. 

Syria only agreed to participate 
whan conservative Arab states 
forming the Gulf Co-operation 
Comm conceded that issues other 
ftun the IraxHraq war might be 
discussed. This was made possible 
by the proposal by King Hussein 
that tbe agenda would be "open”. 

Saudi Arabia, Kuwait and Jordan 
are looking for strong censure of 
Iran for its harrassment of Arab 
shipping in the Gulf, missile strikes 
against Kuwait and the dashes in 
Mecca to July during the Hajj pil- 
grimage. But the United Arab Emi- 
rates and Oman, which also belong 
totheGCC, are unhappy about the 
possibility of a co n f ro n t ation with 
Iran because of their political and 
economic links with it 

Sandra Kftwar reports from Am- 
man; Sir Geoffrey Howe, UK for- 
eign Secretary, ended two days of 
talks with Jordanian leaders includ- 
ing King Hussein yesterday by ren- 
ewing his call to the Soviet Union to 
work toward a ceasefire to the Gulf. 


terrasee - are respectively the 
first, fourth, and fifth most prof- 
itable hotel* In Senegal. . 

■We are not just following 
some fashionable foreign 
trend," Mr Sy says, summing up 


S Africans storm Swapo 
base in southern Angola 


SOUTH AFRICAN forces have 
stormed a guerrilla base in 
southern Angola, killing more 
than ISO Namibian nationalist 
guerrillas and losing 11 of their 
own mm, defiance headquarters 
in Pretoria announced yester- 
day. Banter rep ots from Johan- 
nesburg. 

A statement said the "pre- 
emptive" strike took place on 
Saturday but gave few details. 
Nine nf South Africa’s dead 
were White, two black. 

A brief statement from the 
military command said the raid 


cross the Angola n-N amlbian 
border on sabotage missions. 
The army statement did not 


identity the Swapo base attack- 
ed, saying merely that it was 
north of Owambo, Namibia's 
northernmost province. 

The statement did not say 
whether the South African-led 
forces met resistance from the 
army of Angola's Marxist Gov- 
ernment, often accused by Pre- 
toria of providing shelter for 
Swapo fighters. 

South Africa has ruled miner- 
al-rich Namibia since capturing 
the former German colony dur- 
ing World War One. Pretoria 
has delayed a 1978 United Na- 
-tioas Independence plan, insist- 
ing on the withdrawal dr thou- 
sands.'- o£~ Cuban. troops from 
■ Angola. . ■ - ■ r 

* The latest fighting bit Angola 
after government forces 
launched a major offensive 
against South African-backed 
rebels further to the east 

South Africa said last month 
Its forces were in Angola but 
denied they were there to sup- 
port tbe rebel Union for the To- 
tal Independence of Angola, led 
-fay Jonas SavimbL 


had been carried out by a Joint 
force of South African and Na- 


force of South African and Na- 
mibian (South West African) 
government troops. .... ... 

The operation,' the biggest 
since July when MO guerml&n 
were reported to have dled^was 
! designed to 'thwart blabs to 
black independence fighters to 
infiltrate the huge South Afri- 
ean-ruled territory of Namibia, 
it added. 

Guerrillas of the South West 
Africa People's Organisation, 
who have waged a low-key inde- 
pendence war since 1966, have 
traditionally used ground-cover 
provided by the rainy season to 


Korean campaign charge 


BY MAGGK FORD M SEOUL 


MB KM YOUNG SAK4he 
South ' Korean presidential can- 
didate, yesterday accused the 
Government and the ruling 
Democratic Justice Party of in- 
volvement in a violent attack on 
bis fallow opposition candidate 
Mr Kim Dae Jung. 

The incident, in which around 
100 people attempted to storm 
the hotel in which . Mr Kim was 
■ staying, breaking windows and 
injOring several aides, took 
place after a ca m paig n rally 
held in Pusan, the industrial 
capital of South Korea on Sun- 
day night. . 

The city Is generally believed 
.to support Mr Kim Young Sam, 


who comes from the area, but 
Mr Kim Dae Jung drew a size- 
able crowd at his rally- The at- 
tackerashouting "Kim Young 
Sam for president" were eventu- 
ally dispersed by riot police 
more than an hour after they 
appeared at Mr Kim's hotel. 

Both candidates have pledged 
not to appeal to regional rival- 
ries in their campaigns, and ob- 
servers at the rally said it was 
peaceAiL Supporters of Kim 
Dae Jung had earlier com- 
plained, however, that posters 
had been torn down and later 
said that the police were very 
slow to arrive after the attack 
on the hotel. 






CTtr: 


wte * i * te »Aiii ?r > n ii»'i n ' 


mm 




by what he called Trresreasi- 
Meyeangstenr, saying foe ar> 
my "was forded to take firm ac- 
tion after students burned 
police motor-cycles and threw 
stonu at security guards". 


Students in North Sumatra 
took to the streets earlier this 
year objecting to higher to- 


OPENS TODAY 


THE 

ACCOU 



INTERNATIONAL HNWCUL 


EVICTS AND TCCHMCXOGY 


EXHIBITION 


Barbican Exhibition Centre 
London ECS 
3-5 November 1 987 

Tbday until 6pm, Wednesday, Thursday until 5pm. 

Eatoy free with BnanessCard, 

or bring this advertisement. 


For details, tel 
01-6384378. 






,0? 


■a.* 









Financ i a l Times Tuesday November 3 1987 



I an MacBean’s new 
company began life 
with £2 billion of sales, 
some of Britain's top 
technology and world 
trade, which as he tells 
Robert Heller indudes 
UJC. exports that 
boomed to £600 million 


from “almost zero 


OT often is a new company born with 
£2 bfftion of sales, hs near br makes no 
difference? The wards camefromlan 




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positive achievement, given the inherent difficulties 
such as the power of immensely strong local defence 
manufacturers. One -solution to the problem of 
beating ’em, however is to join ’em, hence the recent 
purchase of defence interests from Lear Siegler in 
the US. 

EC-Marconi can also crack this literally 
well-defended market by unique 
excellence of product, as in HUD - the 
“head-up displays” which project flight 
in fo rmati on in front of a fighter pilot’s 
vision. MacBeante company is “the biggest supplier of 
HUDs in the world? Avionics is a business where 
technology is often common for both military and civil 
^plications, though inmost cases technologytzansfer 
from war to peace is notoriously ‘hot easy to do? 
Tb achieve it involves manipulating something 
MacBean much admires - “the GEC style of 
autonomous operating companies.” Tbday he sees 
"much greater determination” among Ids fellow 

managing dmytnra to tirm Hip rniTtiinl init nnnmyintft 

a strength by exploitin g technology transfer 
MacBean, of course, has to keep technology trans- 
fer flowing within his own operating companies: 
the new GEX>MEumm structure is designed to take 
full advantage of their combined strengths moire 
effectively than in the past 
“We’d readied a watershed”: GEC defence busi- 
nesses that were “very; very successful in their own 
right” had to *fepend a lot of 


w 


GEC-Marconi supplies the . 
communications payload far aD 
Skynet military satellites. ' 





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EC*Marcom is now Britain's mam 
supplier of torpedoes. MacBean has a 
particular reason for citing its Stingray 
programme. At the end of the Seventies, 
Stingray was not melting progress, and 
"we were impotent to do anything about it? 
The management sat down with the-Navy and after 
prolonged negotiation arrived at^firm agreement, 
management control andafixed price? Theresultwas 
a weapon “highly satisfactory in operation” and “one 
of the most successful procurement pro grammes 
ever undertaken? 


MacBean sums up: "we did a sound job andxnade 
reasonable money” - even though in 1978 
Stingray was “in a similar position to Nimrod. It 
was late, over-cost and beset with technical diffi- 
culties? 




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the mark as to be ludicrous? The remit from Lord 
Wemstock, as MacBean himself describes it^ suits 
him fine:“Thereb your business, you’re the manag- 
ing director; please perform and run the business 
L *” sr * s **’ r ^ as you think best I will not interfere so long as itis 
successful; or unless I have something positive to 












• u: r' w .... 
















T HAT leaves MacBean in control of 
activities whichcoveramost extraordinary 
range, both in technologies (from the 
heaviest engineering hardware, building 
the hull c£ a destroyer at to the 

most sophisticated software controlling defence 
systems) and in all environments(from the seabed tb 
22,000 miles above the earth). MacBean is very dear 
shout what his new setiup.will create from this 
extreme diversity: “ciistomer and public perception of 
how powerful GEC-Marooni is, and what potential it 
has - especially round the world? 

Robwt Heller is Edilor-in-Chirf of Finance Mjgulae. 

GEC is the registered trade mark of Hm General Eledxic Company pk. 


Britain’s largest manufacturing employee 

















Financial Times Tuesday November 1 1987 



US frigate fires on 
suspected Iranian 
gunboat in Gulf 


. BY OUR FOREIGN STAFF 

A US NAVY guided-missile 
frigate fired on a suspected Ira- 
nian gunboat that approached 
at high speed in the Gulf on 
Sunday, the US Defence De- 
partment said yesterday. 

This is the first reported Inci- 
dent in which US forces have 
fired on Iranian craft since the 
US destroyed an Iranian off- 
shore oil platform on October 
19. 

Helicopter gunships attacked 
four Iranian patrol boats on Oc- 
tober 8 after they allegedly 
fired on a surveillance helicop- 
ter and on September 21 gun- 
ships hit the Iran Ajr, which the 
United States said it caught lay- 
ing mines in international wa- 
ters. 

The Pentagon said Sunday’s 
incident occurred close to Abu 
Musa Island, identified by the 
Pentagon as a base for Iranian 
gunboats, near the neck of the 
Gul£ Three boats - a traditional 


Golf dhow and two speedboats - 
headed toward the US mer- 
chant ship the MV Patriot as it 
was leaving the Gulf escorted by 
the USS Carr, a guided-miasile 

frigate. 

Having tried to contact the 
boats, but with no response, the 
Carr fired warning shots at one 
Of the suspected Iranian vessels 
when it began, an apparently 
hostile run towards the CS- 
owned (and) operated Patriot,’ 
the Defence Department said. 

The Patriot was described as 
a chartered military supplies 
vessel serving the 3frship Amer- 
ican fleet in the Gulf 

The gunboat subsequently 
broke off its approach, the Pen- 
tagon added, and the Can and 
the Patriot continued on their 
way. 

The Pentagon said it waa not 
immediately clear whether the 
Carr had hit the patrol boat 
with its machine gun fire. 


Fresh problems loom on 
Supreme Court choice 


BY NANCY DUNNE M WASHMGTON 


HEARINGS on the nomination 
of Judge Douglas Ginsberg to 
fill the vacant seat on the US 
Supreme Court are unlikely to 
begin before December, despite 
efforts by President Reagan to 
prod the Senate into swift ac- 
tion. 

With Congressional investiga- 
tors piecing together informa- 
tion about the little-known 41- 
yearald nominee, the Presi- 
dents second choice for the job, 
questions have surfaced which 
could spell difficulty for Presi- 
dent Reagan. 

Judge Ginsbnrg will have ex- 
plaining to do about his deci- 
sion, as Assistant Attorney Gen- 
eral in charge of antitrust 
matters, to help a cable televi- 
sion operator win a free speech 
case before the Supreme- Court 


At the same time, records re- 
veal, he held stock worth 
$140,000 in another cable com- 
pany, which stood to profit by a 
favourable Supreme Court rul- 
ing. 

Conservatives, who have been 
expected to form Judge Gins- 
berg's strongest constituency, 
may be alarmed by another re- 
port made public over the week-, 
end that the judge’s wife, DrJ 
Hallie Morgan, performed aboiv 
tions in 1980, during her medi-l 
cal training and before their 
marriage 

President Reagan has report- 
edly threatened to call Con- 
gress back from its winter ad- 
journment unless the 
nomination gets early consider- 
ation. 


Critic of Panama human 
rights abuses shot dead 


A SUPREME Court justice who 
frequently criticised human 
right* abuses wpriwr Panama's 
military-backed government 
has been shot dead, Reuter re- 
ports from Panama. 

Justice Camilo Perez, 58, was 


ty guard was on duty when the 
judge approached, punched 
him and pointed a pistol at him. 

It said the guard tried to de- 
fend himwir with a nightstick 
but lost it in a scuffle and then 


!shot twice in the chest on Satur- shot Perez twice, hitting him In 
Iday by a security guard in down- the chest, 
town Pansma City in circum- 


stances which the judge’s 
relatives are chall e ngi n g. 

Police and Panama Defence 
Force officials said they were 
probing the incident but conld 
provide no details. According to 
the police statement, the securi- 


‘ Mr Perez had opposed alleged 
human rights abuM raider the 
government of the de facto mili- 
tary ruler General Manuel An- 
tonio Noriega, and he often ab- 
stained from voting on such 
cases in the Supreme Court. 


Argentine 
unions 
mass for 
strike 

By Tim Coona ki aianoa Akw 

ARGENTINA is again riding a 
wave of Industrial action by toe 
trade union movement Govern- 
ment efforts to pot together a 


’govemability pact? with oppo- 
sition political parties have be- 
come bogged down in a welter 
of conftision over fixture eco- 
nomic policy. 

Transport and industry 
throughout the country is ex- 
pected to be paralysed from 
midday to mo rrow as scores of 
powerf u l trade unions have an- 
nounced their support for a 12 - 
hour general strike called for 
by toe General Confederation of 
Workers (CGT) in repudiation of 
the Government’s economic pol- 
icy. 

The general strike will be the 
ninth organised by the CGT 
since President Rani Alfonsin 
came to power in December, 
-1983, and follows a new prices 
and wages freeze announced by 
the Government last month and 
a series of new economic mea- 
sures designed to drastically re- 
duce the fiscal deficit 

The release of October’s infla- 
tion figures in the coming days 
(retail price increases 
thnngM to be in the region of 20 
percent for the month) axe ex- 
pected to unleash a new round 
of wage demands and industrial 
action by the unions. The Gov- 
ernment’s economic manage- 
ment has been widely blamed 
for its defeat at the mid-term 
elections last September. 

In an effort to head off the 
trade unions, toe Government 
has been sounding out the oppo- 
sition parties in the past two 
weeks with a view to negntiatin 
a ‘fcuvernability -pact” in whlc' 
support for legislative initia- 
tives on tax ana local govern- 
ment finance issues ia being 
sought In exchange for govern- 
ment concessions over the con- 
trol over certain key commit- 
tees in the Congress. 

Next month, when the newly-! 
elected legislators take thelrj 
seats, the ruling Radical Partyj 
will no longer hold an absolute! 
majority in either of the two! 
chambers of the Congress, ne-| 
cessi tiling deals with some or 
all of the opposition parties. 

The scope for negotiation, 
however, was greatly reduced 
when Mr Juan SourouiUe, the 
Minister of Economy, said at the 
end of last week that the Gov- 
ernment's economic policy Is 
not negotiable”. This produced 
a barrage of protests from the 
CGT and the principal opposi- 
tion parte, the Peronists, which 
see any fixture political pact or 
txuee -being founded upon sub- 
stantial shifts la economic poli- 
cy, especially regarding In- 
comes and the negotiation of 
the foreign defat 

Mr SouronUle’s statement was 
then denied by Mr Enrique No- 
siglia, the Interior Minister, 


OBITUARY 


Doughty fighter for French Canadians 


BY ROBERT GBBEN8 W MONTREAL 


BENE LEVESQUE, Premier 
of Quebec from 1978 to IMS 
and ionghtf opponent of tu- 
rner r -"« Prime WHaister 
Pietro Tndcan, died an Sun- 
day evening in hospital after a 
heart attack. He was S5. 

Mr Levesque, a formidable 
•rater with an a afoll ingahfU- 
tyte control euMtional crowds, 
was a safer ilgare ea the Ca- 
nadian political stage during* 
the 1979s and early 1989s, 
Via he sought 'attached sov- 
ereignty” for Quebec. - He 
avoided the tera 'separatism.* 

He fought a dramatic battle 
with Mr Trudeau over flmir ofe 
posed virions sf Canada In Mr 
Trudeaa’s view, Canada 
needed a strung benign central 
gove r nment providing hllia- 
' services coast to coast and 
the provinces in line, 
raised In a mixed 
Anglo-French town in Eastern 
Quebec, never forgot hfts own 
Jest that English and Preach 
la Qnshee were Vhe scarpians 
la a bottle.’ 

Mr Levesque, a war corre- 
' for the US forces la 
in 1*44-45, and later la 
for the 


casting C or poration, entered 
politics In 1969 red became 
Energy Minister tu the Ubmal 
gover nmen t s t Premier Jeaa 


He played a leading ide la 
the re-deetiea of the Liberals 
la INS and in the ’Quiet Revo- 
luthm* that transformed Qm- 
bee ferns a mainly rural into a 
modem society. 

Hr Levcsqac 'Was expelled 
the liberal parte la 19*7 
at van 


for his tn 


nra, and 


be sp en t the n ext few yams try- 
lag to wrid together* " 


Q ue be c sepa rat ist groups late 
a political party that eeuUl win 
at tite palls. 

His coalition Parti Qaebe- 
«H» party wuahsdh msalidky 
foe Liberals under Premier 
Robot Bounsra in the 1979 
and 1*73 provincial elections, 
but severe econom ic and la- 
bour problems gave him his 
chance In November 1978. Mr 
Levesque's victory began an 
' ‘ ‘ _ head ef- 



Eene Levesque: i __ 
.Pierre Ti wins 


bee. The 


with 


In 1979, after 
is! 
mi 
the 


Id Co protect 
hsim> tn Qne- 


eentroveralal bnL 

of its classes still 

„ the courts, changed, the 
free of anglophone Montreal 
by malting English language 

«tp « CTIeg al. 

Mr Levesque west a second 


term in 1981 after foiling to 
win a referendum on saver- 
dgoty for QMj wc. TU j rrito- 

endum wus Jfr ®25S 

major defeat at the hands nfMr 
Trudeau. He fodged the qaes- 
tisa la the teftrandain fearing 
outright rejection by a weary 

Francophone Federalists gave 
the coup-de-grace ia toe final 

days of public meetings 

Mr Trudeau went forward 
with Us proposal to repatriate 
tike constitution u 

MSI aad 1982 with or without 
Quebec's approval. A deal 
seemed near, giving Quebec a 
clearer degree of autonomy, 
bat at foe last minate the 
teems were dunged and Qne- 
becioet Its traditional power ef 
veto over constitutional 
change. Mr. Levesque bud 
been out-manoeuvred hr Mr 
Trudeau mid foe other Provin- 
cial Premiers, and he had no 
eptieabut to reftue to sign. 

Mr Levesque had increasing 
problems hoMtng his govern- 
ment together, after Wo defeat 
an foe constitutional issue in 


1382. Crisis followed criri* d*. 
spite his con ti nui ng pcrooasl 
popularity with the people. Re 
resigned as party leader fa 
1985 xromd toe time lint Mr 

Trudeau also left federal' poQ. 
'tics. 

The FQ, under Mr Leva*- 
qne’s successor Hare Mure 
Johnson, went down to igw- 
jninlMiB defeat st foe hands «f 
the Liberate under Mr Bosses- 
sa In December 198S. The Fran- 
cophones said clearly they 
were tired of the independence 
fight and wanted to carve a bet- 
ter economic role for Quebec 
1 ji North America. 

Ironically, foe question si. ? 
Quebec’s relation to the consti- 
tution seems now to have boon ' 
resolved by the Meech Lake 
Agreement, the resuit of * 
compromise between Conser- 
vative Prime Minister Brian ’ 
Hulroaey, Quebec's Liberal 1 
Frontier Mr Bounins and the 
other provincial premiers 
which gives Quebec tie states 
sfa distinct society within the ? 
Canadian confederation. 


Deborah Hargreaves reports on the outcome of a 19-day teachers’ strike 

Chicago schools set out to reform their ways 


THE 19-DAY Chicago public 
school teachers’ strike last 
mouth gave new hwp«*M« to de- 
mands for reform of the inner- 
efty school system and brought 
together a diverse coalition of 
politicians and concerned par- 
ents. 

The agreement settling the 
strike, the longest ever by Chi- 
cago teachers, included a call 
for tiie iw pi—f— of baric 
educational reforms. 

Reform of the sprawling Chi- 
cago public school system has 
long been a pet project of Mr 
Harold Washington's cite ad- 
ministration. Chicago’s Demo- 
crat mayor set up an education 
summit just ever a year ago to 
forge links between schools and 
local businesses, although so 
for the organisation has been 
Uttie more than a talUr* shop. 

Teachers, who say they have 
long, been poshing for reform, 
are donbtfol the new initiative 
win achieve much. Kany par- 
ents are very angry,' says Mr 
Chuck Bardeen of the Chicago 
Teacher’s Union, "but we have 
to wait and aee if they centum 
that anger into solid reform.” 

However, the new 50-strong, 
parent-community council be- 
ing, setup by the mayor's office, 
is charged with malting recom- 
mendations for reform within 
120 days. 

It intends to hold a series of 
public meetings in school dis- 
tricts around thq rite to gauge 


the feelings of as many pa r en ts 
as possible. Reformers say their 
priorities are to involve more 
parents in school derisions and 
to make the school Bo ar d more 

accountable in its spending pot 

jcieg. 

In the first of tbs publie meet- 
ings about L000 people pecked 
into an auditorium at the Uni- 
versity of Hlinoia. Parents and 
administrators were outspoken 
in the need to provide addition- 
al fluids for "revolutionary 
charno T In Chicago’s fhiw lt 
But they free an uphill atrug- 
gleto wrest more money for Chi- 
's cite schools from the Re- 
state 


The Chicago publie school 
system costs about 9880m a 
year, with 42 per cent provided 
by the Illinois stats legislature 
and the rest by the city. Mr 
Washington has been quick to 
point out that the city's SB per 
cent is an unfrir burden. But 
the state adminis tration in 
Springfield has been reluctant 
to make the unpopular tax in- 
creases it claims would be nec- 
essary to provide more money 
for Chicago’s schools. (The Chi- 
cago System differs from other 
metropolitan area** which are 
fended solely by their respec- 
tive cite halls.) 

Teachers poshed for reform 
as part of tbrir contract negotia- 
tions, winning extra money to 
reduce class sizes in certain nn- 



Washlagten: schools a pet 

w- — A 

derachievtng and over cr o wded 
elementary schools, where 
there can be as many as 35 to 40 
pupils in each class. But the 
contract provides for 1,100 
lay-offe to finance the pay rises. 

The new contract was sup- 
ported by about BO-par cent of 
teachers balloted. It provides a 
4 per cent pay rise this year end 
4 per cent next - for below the 10 
per cent this year and 5 per cent 
iy»*t for which the union 
p ushed. Furthermore, the con- 
tract does not restore four days 


lopped off the school year in a 
bid to cut costs. 

What the strike may have 
done is to give the state legisla- 
ture a chance to push through a 
decentralisation plan for Chica- 
go’s public schools It has de- 
bated for the last 10 years. It has 
propo se d breaking up the vast 
system, which covers 430,000 pu- 
pils and 42£75 employees, into 
either four geographical sec- 
tions or 20 mini-districts. 

Advocates of decentralisation 
argue that it would give parents 
a chance to have a say in the 
system. But the teachers’ union 
fears it would end up multiply- 
ing fee already unwieldy tro- 
reaucraey of 4000 administra- 
tors. 

The public school system is 
run by an 11-member school 
board, composed of appointed 
-members who serve for four 
years. The board decides ulti- 
mately where its annual budget 
wffl be allocated. 

Zh the post, the school board 
was seen as very much the re- 
sult ofa wide system of political 
patronage— its members are ap- 
pointed by fee mayor. but it op- 
erates as a separate entity ana. 
once appointed, is not account- 
able to aQy higher authority. Mr 
Washington is now toying with 
the idea of elections for school 
board members, but sceptics 
doubt these will be introduced. 

Other r efor me r s are caning 
for paxeubf advisory commit- 


tees to be elected at individual 
schools and to meet regularly. 

Meanwhile, many students 
have been voting with their feet 
Some parents, distressed at the 
long history of strikes in Chica- 
go, are tightening their bells to 
pay more than $4J)00 a year for 
private education for their chil- 
dren. Many private schools in 
the Chicago area have reported 
an increase in applications jn 
what educators have dabbed 
the "bright flight* from the pub- 
lic school system - private 
schools often have tough en- 
trance requirements- 

On top of this, the dropout 
rate appears to have picked np 
from an already high 40 to 5Q 
pear cent. Teachers estima te 
that 5 A 0 D additional s tude nt s 
dropped out during the strike as 
many pupils found jobs and 
foiled to return. 

But the teachers* drop-out 
rate is almost as high as that of 
the students, Mr Burdeeu 
claims. "Teachers and support 
staff are demoralised at having 
to fight to hold onto their sala- 
ries year after year," be says. 

Less* senior teachers are the 
mori. vulnerable to lay-ofib in 
the current' round of cuts, but 
these are exactly fee sort of 
teachers the system needs to 
keep, Mr Burdeeu says, as they 
still have some enthusiasm for 
the job. 



•ZSt! 


WHERE DO YOU WANT YOUR 

BUSINESS TO END UP? 


-^Of course you want to finish first. 
Naturally you want your business to 
succeed. Burt does your choice of business 
location offer you every advantage right 
from the outsat? 

To gat a clearer understanding of what 
each business location has to offer you'll 
find K pays to make a detailed examination 
of each location's track record. 

Which location is the longest estab- 
lished? 

Which location is situated at the heart 


Of Scotland's central business belt with 
access to 70% of the Scottish population 
within a radius of 50 miles? 

Which location can o ffer 15% capital 
grants, or £3,000 per job. rent tree con- 
cessions, independent consul ta n ts to 
advise you. training gr a nts and flexible 
leases to give an assistance pa ck age 
amongst the best available? 

Which location offe rs free mainten- 
ance on the widest range of premises? 

Which location has a highly committed 


workfor c e and a 9096 strike free record 
over the last five yarns?' 

The answer to all your questions Is East 
Kilbride. 

•^.Tb find out why weVe been winning 
more business than anyone else In Scotland 
since 1947 call our Project 
Hotline free on 0800 833 139 
or complete the coupon and 
send for our fre e colour 
brochure, 'East Kiltwide— The 
Logical Choice'. 


„ . . — rnttandk B en t 1 

I Busmens Location. Please send me a free 1 
copy of -East KHbrtde-The Logical Choice’. I 

Name ■ 

| Company 


EAST 

KILBRIDE 

SCOTLAND'S 
BEST BUSINESS LOCATION 


Address. 


Pos tc ode. 

Tw Tto Wwtoft s D 


I 
1 

J 



■•wwwra me cwnM cm oySmcMaButM* School 


.Tel. 


wit, Funrosi 


I W Kilbrltf^ I Wop iBw Corportfoa. 
■C**”” HW1— . Eet KntwW. OVA. 1LU. 




LONDON 


EAST KILBRIDE 










V 






Financial limes TuesdayNovember J 1987 


WORLD TRADE NEWS 


liatk Portuguese 
a seek to 

S=v..,,. close Italy 

fcjjf, s *« ih.Sk. • • 



Ifc' ■ ■:*« rv 


• CS? 5 ?? 


trade gap 

By Diana Smtti In Lisbon 

PORTUGUESE numii&KtBKri 
are bo wonted by the rapttly- 
exy a ndhig trade gap wife Italy 
tlutf they have 'asked ihe Cava-, 
co Silva Government to inter- 
vene. 

The deficit has soared Aon 
EsStbn (f2lfm> in 1*85 to 
E*76faa (|490ml in 1980 and 
BsWbn . ($400m> in the Orel 
half rf 1987. The rate of cover- 
age of imports by exports de- 
clined from an aheady-modest 
56 percent in 1M5 to a weak 38 
percent at the end of Jane, 
1987. . . 


William DuDforce looks at the problems which lie ahead for negotiations on agricultural products under the latest Gatt round 




WITH LAST week's cautions 
proposals from the European 
Community, all the big ferm ex- 
porters have now staked' out 
their positions, in; the. negotia- 
tions within theGeneral Agree- 
ment on Tariffh and Trade on 
the reform of world agricultural 
trade.. 

In July the US tabled a sweep- 
ing proposal for the total aboli- 
tion of all export subsidies and 
import barriers to form prod- 
ucts by the end of the century., 
Hie EC’s far more cautious ap- 
proach excludes the elimina- 
tion of subsidies and insists on 
the retention of its double pric- 
ing (external and internal) re- 
gime for form products. 

The 13 nations of the Cairns 
Group, which includes Canada, 
Australia and a number of lead- 
ing Third World producers, sub- 
mitted the most detailed pro- 
gramme, largely agreeing with 
the US on a 10-year phasing out 
of all government supports that 
distort trade. 

All three proposals recognise 
the need for urgent action to 
stop further deterioration of a 
situation in which the two big- 


gest traders, the EC and the US, 
are each spending about $ 26 bn 
a year on subsidies that create 
massive surpluses, depress 
prices and frustrate efficient 
producers. 

■Even the US, impatient of 
transitional measures that 
might hamper progress towards 
its final objective of a free mar- 
ket for agricultural trade, has 
advocated a freeze on export 
subsidies at their present level 

A freeze .together with an un- 
derstanding on the responsible 
man a g ement of stocks .form 
part of the short-term measures 
proposed by the Cairns coun- 
tries. They also want an 
across-the-board cut in subsi- 
dies to demonstrate political 
wilL 

Suggestions for short-term ac- 
tion make np the larger part of 
the EC proposal. It looks for 
agreements on minimum export 
prices for cereals and on reduc- 
tions in the quantities of sugar 
placed on the world market 

These would be complement- 
ed by cuts in s u p p ort s for cere- 
als, rice, sugar, oilseeds, dairy 
products ana bee£ negotiated 


on an equitable 'burden-shar- 
ing* basi& 

Hie Europan Commission re- 
gards its more modest approach 
as closer to political and com- 
mercial realities than the ambi- 
tious programme of the US or 
even the Cairns Group's propos- 
als. 

Mir Guy Legras, the Commis- 
sion's director general for agri- 
culture, argues that it is impos- 
sible for the Community with its 

11m farmers to do away with all 
protection. Farmers could not 
be left defenceless against cur- 
rency fluctuations or other un- 
predictable changes that could 
cause serious commercial and 
problems. 

The EC approach outlined in 
Geneva aroused the suspicions 
of the other big form exporting 
nations. To them it smacked too 
much of the quick fi*. which, if 
once agreed, would reduce 
for fundamental, re- 



Argument in the Gatt nego- 
tiating group is now bound to fo- 
cus once again on Nego- 

tiators have to reconcile foe 
need for shortterm action with 


Clayton Yeutten US Special 
Trade Representative 

foe objective of long-term re- 
form at the centre of Gaft's cur- 
rent trade- liberalising Uruguay 
Round. 

Cairns Group spokesmen 
were particularly emphatic on 
this point Emergency measures 
could be applied only when 


there was provisional agree- 
ment on a longterm framework 
of rules for agricultural trade, 
they argued. The 13 would not 
settle for early relief based on 
ad hoc treatment of symptoms, 
Mr Alan Oxley, foe Australian 
delegate, said. 

Hr Michael Gifford, Canada's 
trade negotiator, criticised the 
idea of agreeing a small pack- 
age of deals that would mafce 
only a dent in the farm trade 
problem. All countries, all com- 
modities and all trade distor- 
tions had to be on the table. 

The market sharing implicit 
in the EC’s proposed minimum 
export prices for cereals was se- 
verely criticised by developing 
countries and in a joint state- 
ment by Ur Clayton Yeutter, the 
US Special Trade Representa- 
tive, and Mr Richard Lyng, foe 
US Agriculture Secretary. 

They described the EC pro- 
posal as a list of schemes to in- 
crease the role of governments, 
expand the scope of export sub- 
sidies and carve up foe world 
marketplace among existing big 
players. 


This torrent of criticism re- 
flects a fear that the EC could 
sidetrack the Gatt form negotia- 
tions into concentrating on 
shortterm relief measures and 
a cwnznodity-by -commodity ap- 
proach that would leave the 
fundamental issue of rules for 
agricultural trade untouched. 

However, foe criticism is al- 
layed by general recognition of 
foe 12 EC members’ achieve- 
ment in agreeing on a form re- 
form proposal 

It is acknowledged that foe 
EC has come a long way in a 
short time towards accepting 
foe need for reform. Imprecise 
as it may be on detail, foe Com- 
munity proposal docs foresee a 
'significant, concerted reduc- 
tion* in farm supports, an in- 
crease in the sensitivity of agri- 
culture to market signals and a 
iter use of direct aids to 


Moreover, foe Gatt talks are 
so for on schedule, in the four- 
year timetable extending to foe 
end of 1900 for completion of 
foe Uruguay Round, foe first 
phase, in which proposals for 


the reform of font) trade were to 
be submitted and subjected to a 
preliminary examination, 
should be completed this year. 

Japan and the Nordic coun- 
tries, whose highly protected 
formers make them a special 
case along with Switzerland, 
have promised to table propos- 
als at foe meeting of foe nego- 
tiating group in December. 
They can be expected to take a 
s imilar line to the EC. 

The next staging post will be 
foe midterm review by trade 
ministers towards the end of 
1888. By then the negotiations 
will need to show some prelimi- 
nary results to maintain their 
credibility. 

But foe achievement of any 
results will depend on negotia- 
tors being able to reconcile the 
insistence of the US and the 
Cairns Group on making foe ab- 
olition of subsidies the final ob- 
jective of foe talks, with foe 
EC’s demand for a step-by-step 
reduction of form supports 
without foe declaration of a fi- 
nal objective. 


eir vis 


. 

V. 


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1 « , • .. * ' ■ * ~ ~ 

■* - r. ^ 

r " ' Z- \r-- v. 


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. 7.4-.- isi 


K.' ?■ • 


Cara# sane urged to futer- 
- vent 

Italy has always sold ntoreto 
Portugal than it has bought. 
The two economies are, unfor- 
tunately for Portugal with its 
weaker industrial base, not 
complementary. What Portu- 
gal excels at exporting - tex- 
tiles, footwear and wine- Italy 
net only has in abundance but 
exports itself. . 

Knee Portuguese accession 
to the EC in 1986. foe energy 
with which Italian manufac- 
turers availed themselves of 
newly-opened doors has been 
almost as da—Kwg as of 
Spain, which shot in a few 
months from for down the list 
to foe position of Portugal's 
second largest supplier after 
West Germany. 

However, while Portuguese 
manufacturers have found 
growing outlets for a wide 
range of goods in Spain and 
steadily bnilt np experts there, 
they have not been as lucky in 
Itaty. 

Italian exports to Portugal 
have risen from Es54hn 
(5375m) in 1984 to EsllZbn 
and Rs8Zhn ($57 5m) 
this January-June, Portuguese 
exports to Italy have grown 
more timidly from RsSSbn 
($239m)in 1984 to Es41bn 
($290m) last year and a slightly 
stronger Es25bn ($175m) in foe 
first half of 1987. 

Among mgfor Italian growth 
items are fibres, . machinery 
'and- equipment for the textile 
anil leather industries. the) . 
: north, foe heart. of the textile: 
and footwear industries, foe 
Italians have persuaded amny. 
manuf acturers to buy new ma- 
chinery with a shorter useful 
life than traditional long-last- 
ing equ ip ment from northern 
European suppliers. 

"Buy a cheaper machine. It 
may have a shorter life but It 
won’t be ob solete within a tow 
years,” Is their sales pilch. 

Sales of Italian vehicles and 
tractors base also soared wtfo 
Portugal’s economic recovery- 
They reaebed EslMm by June- 

Portugal’s main exports to 
Italy are pulp (ErtLSbo), vege- 
table oils (EsZbn), wine 
(Eslbn) and bed or table lin- 


Arianespace in FFrl5bn 
launch vehicle order 


BY PETER MARSH 

ARIANESPACE, the company 
which sells satellite launches 
on Western Europe’s Ariane 
rocket, plans to place a 
FFrlSbn (JL5bn) contract for 50 
launch vehicles in one of the 
biggest orders Europe’s space 
industry has seen. 

The contract is due to be 
placed next year with a group of 
about seven European aero- 


government has a 34 per cent 
stake, said yesterday the order 
wonld give it the chance greatly 
to simpliiy its procurement pro- 
cedures. 

Up to now,- Arianespace has 
contracted for parts for its .rock- 
ets with separate aerospace 
suppliers, involving it m count- 
less negotiations with dozens of 
manufacturers. 'At the moment, 
we order two launch vehicles a 
year and receive a bill roughly 
every hour,’ Arianespace said 
yesterday. 

Hie new order will also be the 
first time the company has 
iced contracts for rockets in 
tches any bigger than eight, 
underlining its increased confi- 
dence . about future space 
operations. 

The companies likely to bene- 
fit from foe order, which will in- 
volve racket* to tte fenncBcflite; 
tropen.„lfl9l. apd-lQp7 r , aw. 


Aerospatiale, Matra and SEP of 
France, MBB of West Germany, 
Britain's British Aerospace,! 
Contraves of Switzerland and! 
SNIA-BPD of Italy. 

All will be given orders from' 
Arianespace for specific sec- 
tions of Ariane rockets, leaving 
the company itself to deal with 
subcontractors for each major 
Pafo 

The company to be most af- 
fected by foe change will be 
Aerospatiale, which has the job 
of b uilding the first and third 
stages to the rockets - foe big- 
gest single package under the 
new arrangements for splitting 
up the work. 

According to Arianespace, 
foe new procurement policy 
should shorten lead times and 
cut costs. Under foe procedure, 
a single Ariane should take two 
years to. build, compared to 
three and a half years now. 

All-foe rockets to be built un- 
der the new contract are of the 
Ariane-4 type, the first of which 
is to be launched next year. 

Ariane-4 is to be bnilt with 
add i t i o nal boosters strapped to 
its first-stage feel tank, so giving 
it extra thrust and the capabili- 
ty to lift into orbit larger satel- 
lites than the existing versions 
of Ariane, which - so for has 
nMftJf launches; .15 of them-, 
sncectasftd-. _ 


Bank of Tokyo to sign 
loan accord with Peking 


THE BANK of Tokyo will sign a 

business tie-up agreement with Trade, h< 
China Trust and Investment Under 
Carp for Foreign Econ omic R c- 
lations and Trade {CTICFKRT) 
in Peking, a bank spokesman 
said, Reuter reports from Tokyo. 


CTICFKRT, which was set up 
with 150 mn yuan in Pekfog in 
September to sub-lend foreign 
government loans to China, is 
owned- by the Ministry of For- 


eign Economic Relations and 
he said. 

Under the agree ment, the 
bank will help CT1CFERT to 
seek foreign loans and invest- 
ment 

:• lfr Kaysone Phonmhane^ 
chief of Laos* Communist Party, 
has met Soviet leaders and 
reached agreement on increas- 
ing the efficiency of economic 
ties between the two countries, 
AP reports. 


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US, Mexico to sign trade pact 


BY NANCY DUWE M WA8HMQTON 


THE US and Mexico are to sign 
on November 6 a trade and in- 
vestment pact which could lead 
to new market openings. 

The framework agreement 
sets up a formal consultative 
mechanism to resolve bilaterial 
disputes and establishes sever- 
al working groups to discuss 
trade and investment problems, 
ranging from steel to textiles to 
intellectual property rights. 

The pact has been hailed by 
conservatives such as Congress- 
man Jack Kemp, a Republican 
presidential candidate who is 
proposing a North American 
free trade area. President Ha- 


has also talked about es- 
ilishing a North American 
common market 

However, a spokesman for foe 
US Trade Representative 
played down foe new agree- 
ment as one which just may pro- 
duce new liberalisation. *We 
prefer to go foe multUaterial 
route,* he said. "However, if that 
effort fells, we will seek market 
openings wherever we can.* 

Because foe agreement does 
not call specifically for tariff re- 
ductions it does not require 
congressional approval. 

Officials say that the estab- 


lishing of a structure to discuss 
disputes will inevitably pro- 
mote trade and investment be- 
tween the two neighbours. Mex- 
ican officials hope to bypass 
protectionist sentiment, and foe 
US is anxious to help a co-oper- 
ative debtor nation climb out of 
the red 

Canada is the largest trading 
partner of foe US. Mexico is the 
third largest, and foe US is Mex- 
ico’s largest customer. Last 
year, US exports to Mexico to- 
talled about yiftm, while im- 
ports from Mexico reached 
gl7bn. 


South Korean surplus 
doubles to $4.83bn 


SOUTH KOREA'S trade surplus 
in the first 10 months of 1987 
more than doubled to $4.83bn 
(£2Abn) from $&29bn for the 
same period last year, the 
Trade and Industry Ministry 
said yesterday, AP reports from 
SeonL 

The J anuary -October surplus 
surpassed that of $3. 13 bn for all 
Of 1968. 

Officials said foe surplus in 
October alone stood at $847m, 
compared with 9831m a year 
ago. 

Led by textiles and electron- 
ics, Korean exports between 


January and October rose 33.8 
per cent to $37.46bn from the 
comparable period last year, 
while imports rose 26.9 per cent 
to$32.63bn. 

Textile exports in the 10 
months were worth $9.72bn, up 
35.7 per cent from a year ago. 
and electronics were valued at 
$7.78bn. up 48.3 per cent, minis- 
try officials said. 

Exports in October alone 
were $4.14bn, down 9.7 per cent 
from September but up 25.8 per 
cent from October 1988. Imports 
in October were $3J29bn com- 
pared with $2.68bn a year ago. 


ADVERTISEMENT 


THE VOICE OF SOUTH AFRICAN BUSINESS 


SA economy has adjusted 
to adverse economic and 
political shocks 




. .' . . j m m m- - .*••• 'r.'-cf r* ♦ •. - • 

Dr Gerhard de Kock, Governor of the Sotah African Reserve Bank, talks lo John 
Spin 2, Finance Editor of die Johannesburg Sunday Star. 



Dr Gerhard d* Kock 


Spha: In what ways, if anK has the nature of 
the Sooth African econoiity teen altered in re- 
cemycan? 

De Kudu The£owh African econony has been 
forced to adjtut » a sens of adverse economic 
and political shocks. The counrry’s economic and 
political mkuiota wih the outside void have been 
u nd er m ess and the single mag important conac- 
queoce has bean South Africa's emergence as a 
capita] oqjoniog moon. 

(induing chants in 


BlUS^bOUan materialised dorfatg 1985 and 1 
alone. These outflows, of which more than R1I.5 
billion occurred alter the imposition of die debt 
standstill and the rctmpositicin of exchange con- 
trol omst non-resident equity capital at the end of 
August 1985, amounted to 6% of grass domestic 
product ouer the two year period. 

Together with other aduasedevelupiitciJls, such 
as droughts and weak commodity prices, far- 
reaching adjustments in die Somh African econ- 
ortty have been required. These have taken the form 
of a combination of exchange me depreciation, 
higher inflation, slower growth and, in general, 
a lower standard of liviqg. The only options open 
to BSrwae between different methods of adjust- 
ment on the one hand add different w%s cf spread- 
ing the adjustment, butden on the other. 

Although the challenges have been darmiiiig, it 
is gratify^ thaa the econorny has risen w the oc- 
casion. The balance of payments adjustment has 
been such dal while ongoing debt repayments have 
been made, tbe foreign reserves have risen sub- 
stantially and the foundations have been Laid for 
fearer economic growth. 

Spfrat Tb what extent has foreign debt been 
repaid? 

De Kochs At fee end of August 1985, when die 
debt standstill was first imposed, the total foreign 
debt of the South African ecowxny amounted w 
USS23? biDiai.-By the end of 1986this figure had 
declined to USS2Q4 billion, valued at be dollar 


developing countries dcserioracd from an aver- 
age of 277% in 1984 m 355* in 1986 and an esti- 
mated 368% in 1987- 

Soira: Are the monetary authorities satisfied 
frith the latest foreign debt agreement frith 
creditors? 

De Kock: In February 1987. mutually sadsfecto- 
ty debt repayment arrangements were negotiared. 
Under these Second Interim Arrangements, a 
longer debt storistill period (Bom July 1987 to June 
1990) u«s agreed upon and a formula far tbe repqy- . 
meat of about USS1.5 billion of debt “within the 
net" during this period rv» determined. A revised 
“exit ciansc" was also accepted which allows cre- 
dhors ® convert debt inside the net to long term 
debt outside tbe net. Debt » converted becomes 
repayable over a 10 year period. 

The first major EepRymems of about USS300 
mfllkHi under the new arrangements were made 
comfortably in July 1987 without any noticeable 
pressure on either tbe e x change tae or the gold 
and foreign exchange reserves. According to the 
agreed formula, the nexi set of repBymam amount- 
ing id about US$200 million will be i rewfe in De- 
cember 1987. 

Sjdra: In terms of a tra de we ighte d basket of 
currencies, the rand was about 28% bigier at 

tatfJnK^ftritfanOhbrwii^ 

De Kock: Tbe surpluses on the current account 
have more than offset outflows on the capital ac- 
count. The gold and fotrignexchan^: reserves hare- 
accordingly benefiwL The Reserve Bank’s foreign 
reserves increased from akwtf lissi/j trillion 
at tbe end of April 1986 to US£k5 bfllioo at the 
ead of August 1987. 

Sptra: What are the pr i nc ipal factors behind 
South Africa* huftofing external economic 


gust 1985. Honeuei; if valued at tbe dollar exchange 
rates at the end of 1986. that figure for that date 
becomes US$22,6 billion. 

The difference arises from the effect of the 

de predati on of tte US dollar against caher major 
cunencics on the doHiir value crScxab African far- 

dgn loans denomiiiaKd m aotHtotownwefes. 
Spine Is Sotah Afrfcft fonsn debt pasttkm 

ca tupreab te in aw w « w k hd« of developing 

ctNutries? 

De Kock: Na South Africa is oas of a bandfiil 

(rf COttntries in the world which is actually reduc- 
ing fa outstanding debts. In comrast to the poea- 
tknoftkvdoph^caiDaics,accqiced criteria for 
MBestihg tcovn&ys foreign atastioa shew that 

South Africa is now technically tai d ei fa onowed. 

1310, for example, South Africa's total foreign 
atwwpRyroentain 1985 amomued id only 107% 
cf exports cf goods and services, compared with 
m«fflgeofSfi% (and, in some cases, mote than 

tries!' Moreover. ^^6 ratio 

ri c riin ed to 9,5% and for 1987 it is estimated to 
be a mere 7.5%. 

A farther irtScanoo of South Africa's sound for- 
ejteudebt ponttoQ is the sire told recent behaviour 
ofthe ratio of fbreigQ debt to total exports of goods 
and services. Even at hs peak of 171% in 1984, this 
taiouasnn monlinatdyhigh.lt then fell to 108 % 
in 198$ and to an estimated 90% in 1987. In coo- 
oast, ttKooropaidile tatio for Wsfcro Hcnaspbcrt; 


De Kock: One reason was the successful main- 
tenance of law and enter and the tesulBix improw- 
ment in ewerseas perceptions cf tbe South Afri- 
can situation. Anotoer mate ris bt the gold price 
from an average of USS3I7 an ounce in 1985 to 

USS368 m 1986 and to an average tbns far hi 1987 

cf US$436. 

Clearly, however, a major role was hIso played 
by monetatyaxl fiscal polities from roughly the 
middle of 1984 In particular, the restrictive poli- 
cies pursued fttm that till mid-1985 served to 
eliminate overspending in the economy and to 
produce a large surptas on the current account nf 
tbe balance of payments. 

Spirt: What rote w*s performed by exchange 
rotes in tbe adjustment process? 

De Kock: The official exchange rate policy of 
managed floating ha* been a major contributiiK 

factor. Thcexdnngratomovemetzsdiathaveoe- 
cuned under this policy not only hdped n brine 
about die large cuiten atxonm surplus and pro- 
tect the gvW and foreign exchange reserves; they 


Spira: Do you beBere that the introduction of 
targets tor the pwth in the money supply has 
ben saoccarfbl in the Rgbt of the fe8nre of M3^ 
tbe targeting variable, to attain even the tower 
end of the target range? 

De Kock: In March 1986 die Reserve Bank, with 
the concurrence of the Minister of Finance, set a 
taraet range of 16 % to 20% fordte noe of increase 
in me broil money supply (M3) between the fourth 
quarter of 1985 and the north quarter of 1986 As 
matters turned out. M3 remained below the target 
range (faring most of the year and eventually in- 
creased by only 10,1% ever (he fall targeting period. 

In the erem. huwevec. tool spending and produc- 
tion increased — such that the final outcome was 
an increase in noRnnargro&s domestic product be- 
tween the fourth rauner of 1985 and the fourth 
quarter of 1986 cfl8/t%. This means (hat the in- 
come vdochy cf drnilahon (V} of M3 — the ratio 
betucea nominal gross domestic product and M3 
— must have increased over the year. In feet, V 
increased by 7/6%. 

The main reasoQ for [his devrioptneiu was rifis- 
inBrniexiiarion'' — tbe replacement aFbanlc credit 
by other forms of credit emended directly fay 
primary lenders to so-called ultimate borrowers. 
By definition, the “effective" broad money sup- 
ply (M3 adjusted for changes rartsvdociryofcir- 
cuJauoiO therefore increased over the taigpusg peri- 
od ty die same percenage as nominal gross domes- 
tic product, namely 1SA%. This increase was well 
within tbe target range set for M3 itself. 

Spira: The econ om y grew by less (ban 1% in 
JSNB6 and tints far this year (he prontiseofs more 
i upward thrust has not been ftriffHed. 

1 has (he npwrlrg been so slu gg ish? 

DeKbcfc: De spit e the s trong balance of payments 
position and relatively kw infixes rates, the in- 
ducement to invest and the propensity to consume 
are not strong enough to fend real momentum to 
the economic upswing. 

Tbe evidence suggests that a major part of the 
answer still lies — as it has done for some time 
now — in a lack of sufficient business and con- 
sumer confidence. This, in turn, appears to stem 
from uncertainty associated with the present 
process of political and social reform and from con- 
cetti atom deteriorating overseas perceptions rf 
South Africa since late 1984. 

The problem at preaau is not one of excess de- 
mand or overheating. bis OK of mafopoie spend- 
ing and production. The paradox is tbk the share 
market is booming while the real economy is 
subdued. 

Spinu What, then, m (he find analysis, are (he 
polity impfitetions of the prenfline economic 
paradox? What could and should Ire done In 
boost the upswing and to promote economic 
growth and prosp eri ty hi Sooth Atria? 

De Kudu In (he sphere of short term economic 
strategy, monetary policy will remain expansion- 


ary as long as the present situation persists. The 
Reserve Bank will coruinueKt encourage reasona- 
ble growth in bank credit and in the money sup- 
ply ty ensuring an adequatstipptycf cash reserves 
to the banking systrm at relatively low rediscount 
and other accommodation rates, lb this end, full 
use will be made of the market-orientated tech- 
niques of public debt management and open mar- 
ket operations. 

Reflecting this approach, in March 1987a new 
target range was sa for the rate of increase in M3 
of 14% to 18% between the fourth quarter of 1986 
and the fourth quarter of 1987. It is believed feat 
the attainment of this target will be constsam wife 
a projected further acceleration, of real gross 
domestic product growth and a further gradual 
decline in the rare of inflation. 

Spin: One ofSonth Africa* most pressing eco- 
nomic problems remains itslrigh rate of infla- 
tion. How does this problem rank on the Bs! of 
priorities among economic policy objectives? 

De Kock: The Reserve Bank remains deeply con- 
cerned about inflation- Morewx it fuUy endorses 
the view feat there is no long run trade-off through 
which growth can be enhanced by a wfilingness 
to accept a higher rate of inflation. In the long run 
inflation is detrimental to growth. 

But against the background cf fee sluggish econ- 
omy. we do not femora severe tightening of mone- 
taiy policy in order to aoederate progress toward 
reducing the inflation rate. 

The main cause of tbe temporary acceleration 
of the annu a l ised quarterly inflation rate from 
12,8% in the fourth quarter of 1984 to 26% in the 
first quarter of 1986 was (exceptionally) not ex- 


tionaf fee exchange rate between 1983 and 1986 
This is home out by the feet that following the 
appreciation cf the rand during the past year, (he 
rate cf inflation has slowed down to around 15% 
during the first two quarters of 1987. 

Moreover, provided there ts no new deteriora- 
tion of political pereqttiors and no reappearance 
of demand inflation, fee rate of inflation should 
dec line yet further in the period ahead. That such 
a reduction remains a major objective of mone- 
tary policy is shown by the adoption of a redfaced 
target range fix fee broad money supply. 

Spin: Whai is required to restart greater con- 
fidence in the econonqr? 

Da Kock: Although they are vitally importa nt in 
their own right, (be various economic policies cur- 
rently being applied will not, by themselves, be 


_ e economy will not ap p roach anything Lite 
ffi optimal performance until businessmen and 
consumers gain a more positive virion of South 
Afrietrt social and political future. Tter is tilde 
that monetary and fiscal policies can do to extri- 
cate economic decision^ from the political con- 
siderations wife which they are currently entwined 
in South Africa. This is fee realky feat has to be 
recognised. 


— ui rcsenes; 

1 domestic economic activity agatm 
fee deflationary impact rf the various adverae ex- 
tranrous developments between 1983 and 1986 
Thus, forenatee, the depredation of the mid 
that occurred al certain stages served to maintain 
or increase the rand wdae of gold output arai of 
many other South African exports — withsecoo- 
daryctpamfonaiy effects on «her forms of eco- 
nomic activrty. Al the same dm:, it afforded ad- 
ditional protection to many domestic tnanufecttir- 
ing industries competing with imports. 


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10 


Financial Times Guides to Investment 
and Financi al Planning 


k FINANCIAL PLANNING FOR 
r THE INDIVIDUAL 

by Alan Kdfy, FUrtner, GrantThomttm. 

(2ndEdi±itm) . .. 

Completely revised and updated in the light of major 
changes in legislation and the marketplace, this guide 
provides you with essential information on investment 
planning, unit trusts and investment bonds, pension 
arrangements, tax planning, personal pensions, 
personal equity plans, a Personal Financial Planning 
Questionnaire and aTJyingTidily Log’. Published in 
s tfsoriari nn with the Institute of Cha«lc»ed 
Accountants. 

Price: £9.95 UK £12/USS17owaems. 

Published October 1987. 

k INVESTING FORBEGINNERS 

byDarudO’Sbea . 

This investment guide analyses in a practical way me 

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the advantages of different categories of quoted 
investment, examines a whole range of refated 
essentials such as the interpretation of company 

accounts, and gives an up-to-date review of relevant tax 
roles. An ideal guide for pcopk new to the srockmarkct, 

as well as experts. 

Price £9J50 UK £12/US$ 17 overseas. 

Published January 1987. 

► INVESTOR’S GUIDE TO 
THE STOCKMARKET 

bjGcrrdonGummbvp 

Completely revised and updated in the light of me Big 
Bang' this edition explains the workings of the 

stoctaiarker and bow to profit from it the D-l-Y- way. 
It gives advice on how to set up and manage an 

investment portfolio, and make the best use of your 

fa piwl, 

Price£9£0UK £12/USS V7 overseas. 

Published November 1986. 


Considerably expanded, the 3rd cdition ofWbttang 
Abroadisthc indispensable guide tolivingand 
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aspects -both personal and financial -of moving and 

working abroad, the book helps expatriates to 
maximise the benefits of overseas employment Dorft 
leave home without it. 

Price* £&95 UK £11/USS 16 overseas. 

Published November 1987. 

. A GUIDE TO FINANCIALTTMES 
^STATISTICS 

(4 th Edition) 

Do you really know how to get the most out of die 
statistics pages ofthc FT? The Guide provides die 
answers. It givcs'zU the information to make the FT 
statistics work for you and enable you to benefit 
financially. Invaluable to both the expert and the 
genera] reader wishing to know how the market works. 
Price £1L50 UK £13/US$ 19 overseas. 

Pob tubed November 1987. 


ORDER FORM Please return k* The] _ 

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irtment, Financial Time# Business Information, 
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Financial Times Tuesday November 3 1987 

FT LAW REPORTS 


English reinsurance follows 



P ET VE STA v Bl 
OTHERS 


TIELSKA- 
AND 


Court of Appeal da rd Justice 
O’Connor, Lord Justice Neill 
and Sir Roger Orxnrod): October 

301967 

A FOLLOW-settlements danse 
In back-to-back reinsurance 

overrides a claims control ctonsc 
if the settlei claim was valid and 
unanswerable under the law of 
the original policy. Also, a tav- 

w . UabOity for failing to ob- 
tain a valid and effective retn- 
nuance contract on behalf of the 
reinsured can be subject to ap- 
portionment on a contributory 
negligence basis. 

The Court of Appeal so held 
when dismissing an app eal by 
representative underwriter, Mr 
J.NJL Butcher, from Mr Justice 
Hobhouse’s decision that he 
and other underwri te rs were li- . 
able to {"damnify Forsikring- 
saktielfikapet Vesta under a re- 
insurance contract. A 
cross-appeal by Vesta from the 
judge’s decision that any alter- 
native liability .incurred by 
Lloyd's brokers would be ap- 
portionable between them and 
Vesta was also dismissed. 

Section 1 of the Law Reform 
(Contributory Negligence) Act 
IMS provides: 1(1) Where any 
person suffers damage as the 
result partly of his own fault— 
the damages recoverable— shall 
be reduced— as the court thinks 
Just and reasonable..* 

Section 4: "fault means negli- 
gence-. or other act or omission 
which gives rise to a liability in 
tort-.' 

LORD JUSTICE O’CONNOR 
said that in September 1978 a 
very severe gale struck the 
coast of Norway and caused 
damage to a fish farm operated 
by Fjordlaks Taflord ATS. 

fjordlaks was insured by Ves- 
ta, a Norwegian company- Vesta 
reinsured 90 per cent of the risk 
with Lloyd’s under wri ters. The 
insurance and reinsurance con- 
tracts contained a safety regula- 
tion clause that Tjordlaks 
would keep a 24-hour watch 
over the site, ftordlaks was in 
breach of that clause. 

By section 51 of. the Norwe- 
gian Insurance Contracts Act 
1980, a breach of safety regula- 
tions was no defence to a claim 
under the policy unless the loss 1 


was .caused by the breach. The . 
lott lud nothing to do with ab- 
sence of a 24-hour watch, and \ 
Vesta settled Hordlaks’s clmm 
tor NKx2.75m (£248,000). 

The reinsurers refused to pay 

their 90 per cent on the ground 
that the 24-hour watch danse 
was a warr a n t y in a contract 
governed by English law, and 
the breach entitled then to re- 
fuse to pay regardless of toe po- 
sition in Norway. 

Mr Justice Hobhouse held 
that Vesta was entitled to recov- 
er. 

The reinsurers’ anneal 
against t hat finding should be 
dismissed, for the reasons given 
by Lord Justice NeilL 

Mr Justice Hobhouse .went on 
to consider an alternative-claim 
by Vesta against the brokers in 
the event mat Vesta could not 
reco v e r fro m the reinsurers. 

He held that a failure by the 
brokers to report to Vesta that 
Fjordlaks could not comply 
with the 24-hour watch clause 
was a breach of their duly owed 
to Vesta; but Vesta was guilty of 
contributory negligence in that 
it should have remembered it. 
had received no reply from the 
brokers on the 24-hour watch 
problem. 

. * He said the brokers* negli- 
gence would have been caus- 
ative of the loss, and appor- 
tioned the fault 79 per cent on 
Vesta and 25 per cent on the 
brokers. Vesta appealed against 
the finding of contributory neg- 
ligence and apportionment 
The Issue was whether, on the 


The judge said be was bound 
Ijy Sayers vSariow[l9W 1 WLR 

623 where the plaintiff was a 
contractual visitor to premises. 
The Court of Appeal said it did 
not matter whether the cause of 
action was put in tort or con- 
tract and apportioned blame 
awarding three quarters of her 
damages. . , . 

In Sauer x v Harlow, the plain- 
tiff paid to use a public l avato ry 
ind a duty of care was owed to 
her by the ewuheil, in contract 
and in tort She was locked In 
and, while attempting to climb 
out, she fell and was injured. 

That was a category 3 case. 
The decision was not only right, 
but it was binding. Mr Justice 
Hobhouse came to the right con* 
elusion on this topic. Vesta s ap- 
peal was dismissed. 

MR JUSTICE NEILL, agreeing, 
u was common ground that 
the contract of original insur- 
ance was governed by Norwe- 
gian law, and that Vesta was lia- 
ble to indemnify FjOTdlub. 

Mr Justice Hobhouse said 
there was express provision tor 
the *«rwm of the reinsurance 
and original insurance to be the 
MiiMt The reinsurance was 
manifestly to be back-to-back 
with the original insurance. The 
reinsurance was an English law 
contract, but was made with ref- 
•erence to and : on the terms of 
the Norwegian law contract or 
original insurance. 


er to apportion 

Reform (Contributory Negli- 
gence) Act 1945. 

Vesta pleaded its claim in 
contract and tort That was but a 
recognition of « clearly estab- 
lished principle that where, un- 
der the general law, -a person 
owed a duty to another to exer- 
cise reasonable care and skill 
in some activity, a breach of 
that duty gave rise to a claim in 
tort, notwithstanding that the 
ac ti v i ty was the subject matter 
of a contract between them. 

Mr Justice Hobhouse identi- 
fied three categories of case in 
which tiie question whether the 
1945 Act applied to claims in 
contract could arise. 

Category 3 was "where toe de- 
fendant’s liability in contract is 
the same as his liability in— neg- 
ligence independently of the 
existence of any contract*. The 
present case fell squarely with- 
in this category. 


The crucial question 
what effect was to be given to 
the 24-hour clause in the rein- 
surance contract 

The Slip and endorsement re- 
ferred to the J1 standard form 
of Lloyd’s reinsurance policy, 
■being a reinsurance — to follow 
the settlements of the reas- 
sured. 

The reinsurance contract also 
contained a control 

rimiw that: Tn the event of 
loss— no payment, shall be 
made withoutthe consent of the 
underwriters who shall have 
control of all negotiations. Fail- 
ure to comply with any of the 
warranties— will render this 
policy nuU and void.' 

In Insurance Co qf Africa v 
Scot, Lord Justice Robert Goff 
said that the effect of a follow- 
settlements clause was that the 
reinsurers agreed to indemnify 
i n wi TMn In -the event that they 
settled a «i«hn- He said the un- 
derlying philosophy of a claims 
ion clause was that 

„ .. ... ; should not be made 

without ap pro v al of reinsurers. 


He said "the follow-settle- 
ments clause must be construed 
in its context in the policy, as 
only requiring reinsurers to fol- 
low-settlements which are au- 
thorised by the policy- This et 
fectively emasculates the 
fellow-settlements clause; but it 
is what the parties- have 

agreed.' 

The underwriters placed 
strong reliance on Scot, arguing 
that the importance of the fol- 
low-settlements clause was 
largely nullified by the first 
sentence of the claims control 
clause. 

In the present case, however, 
the fact that a relevant loss bad 
occurred was not in dispute. 
The question was whether Ves- 
ta, against whom the insured 
had a valid and unanswerable 
flnfm according to Norwegian 
law, could recover under the re- 
insurance policy- 

The underwriters must at all 
piatwiai times have contem- 
plated that their right to have 
. sole control of all negotiations 
was governed by Norwegian 
law. 

As a matter of construction of 
the reinsurance contract and by 
seeking to ascertain the pre- 
sumed intention of the parties, 
the Watch clause bad to be given 
the same effect as it was in the 
original insurance contract 
That was the only solution 
which made commercial sense. 

With regard to contributory 
negligence, this was clearly a 
category 3 case, where the bro- 
kers’ liability in contract was 
the as their liability 

would have been in tort Ac- 
cordingly, any damages could 
properly be apportioned. 

SIR ROGER ORMROD, agreeing 
that the appeal and cross-ap- 
peal should be dismissed, said 
that the existence of the con- 
tract created a degree of prox- 
imity between Vesta and the 
brokers sufficient to give rise, 
on ordinary principles, to a duty 
of care and to a claim in negli- 
gence. Consequently it was a 
tnw fey apportionment of d a m - 


For the underwriter*: Timothy 
Walker QC and Andrew Smith 
(Cbde&Co). 

For Vesta: Andrew Longman 
QC and Adam Fenton (Richards 
Butler). 

For the broken: E-M. Ogden QC 
and Christopher Purchos (Hewttt 
WooQacot&Choum). 

By Rachel Davies 

Barrister 


i!*. "" i 


. ■ . . . > • -.'rC.Ve^£ • , J ...... •• V« r •' 


. .I.'** I.-’ 'U-- 




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Fi n a nci al - Tiroes Tuesday November 3 1987 


Every Cloud Has A Silver Lining. 




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OFT studies industrial 
gas overcharging claims 


SYMAUWCESAMU&SON 

THE OFFICE of Fair Trading 
said yesterday it was looking in- 
to complaints that the British 
(lag Corporation is abusing its 


iig{ industrial consumers. 

After informal inquiries, it 
will decide whether to launch a 
formal investigation under the 
Competition Act 1980 or the 
Fair Trading Act 1973. 

The Gas Consumers Council, 
which handies com- 

plaints b>y domestic gas users, 
said the c o rp orat ion was being 
accused of following policies 
"against the public interest" and 
c ont r ar y to anti-competitive 
practice. 


reply to the charges, yesterday 
strongly denied them. 

However, the complaints are 
broadly supported by Mr Peter 
Harris, an independent tariff 
analyst at the Newmarket-based 

Energy Research Centre. 

He claimed last night to have 
evidence that some firm con- 
tract customers had been 
charged more than the maxi- 
mum of 35J5 pence a therm that 
the corporation announced on 
Julyl. 

National Utility Services, an 
international tariff co nsul ta n cy, 
ni«n claimed that UK busi- 
nesses were paying more than 
their counterparts in other 
'leading industrial nations. 


ration’s first annual report after ; 

its privatisation contained for 
less commercial information 
than its pre-privatisation re- 

P Artording to Mr Hanfe, thej 
disparity between UK and con- ' 

tinental gas prices can be P*™* 

explained by a different meth- 
od of measuring the sales to the 
customer. While British Gas 
prices were based on the feeTs 
gross calorific value, the prices 
la Germany and other parts ot 
Europe were based only on net 
calorific value, allowing for the 
1(L8 per cent loss of useful heat 
during combustion. 

British Gas yesterday said 
that in top-level discussions 

■ Murnpfl ft 



Woolworth executive leaves 


BYMKKlTAri 

MR MALCOLM PARKINSON, 
chief executive of Woolworth - 
the high street retail chain - and 
a key figure last year in the 
company's defence against a 
£L8bn bid from electrical re- 
tailer Dixons, left the company 
y e s t e rday. 

A statement from Woolworth 
H nidiitg n gave no further infor- 
mation about the reasons for Mr 
Parkinson's departure, and the 
company reftased to elaborate. 
The parting, however, is not 
thought to have been deeply ac- 
rimonious Woolworth con- 
firmed that there is no legal ac- 
tion outstanding between Mr 
Parkinson and.the company. 


Mr Parkinson, aged 45 and 
with an earlier background in 
marketing and advertising, 
joined Woolworth via its acqui- 
sition of B A Q, the DXY chain, 
in the early 1980s. At the time of 
the Dixons bid in early 1968, he 
was mar keting director at B & 

Q_ 

He was widely credited with 
much of Woolworth’s successful 
defence strategy- in particular, 
the prominent advertising cam- 
paign, which emphasised the 
fhungnH nnrfwr way at the com- 
pany’s high street stores. 

Shortly after the bid's failure, 
in July 1988, Mr Parkinson was 
appointed chief executive of. 


the WooTworth chain stores, a 
post he held until yesterday 
morning. He was also a director 
on the main Woolworth Hold- 
ings board. _ 

Yesterday, the company em- 
phasised that the Woolworth 
subsidiary was reorganised Into 
five business units in early July 
- covering various, sale areas, 
such as toys or gifts - and added 
that there was no immediate in- 
tention to replace Mr Parkinson 
as chief ex e c utiv e, although 
some co-ordinating appoint- 
ment might be madelater. 

Shares in Woolworth fell 5p to 
327pu • 









RACKING • SHELVING • CONTAI NERS • STORAGE TROLLEYS » BOX PALLETS • AUTOMATIC 
RETRIEVAL SYSTEMS * RACK SUPPORTED BUILDINGS. 


S3 FIX EQUIPMENT UWTED Eagadov Bowl 


SCHAfTEK SYSTQvG JNTOiNAXJCNAlj. 

^waiawiwepbcwoasMeoii wmti 


I SSI FIX O VtaUSMMm 


TUBOS 

DEACERO f f ^ TAMSA 

DE MEXICO, SJL 

TUBOS DE ACERODE MEXICO. ? A.(Ti^A_^M&daj^din| 



emaias aBBaaBBBSS 

tbsscsesssssastSsesi?**, 

Signing the term sheet® behalf 

SCSatn i Advisory Committee 

is: ac ATSBaBa®st-*»« fc 

National Bank. Thbwde AcerodeMfixfcftSA. 

M&ica D-F 

October 87, 1987 - 


Farms and 
nurseries 
seek £10m 
storm aid 

, By Bridget Bloom 

IMMEDIATE g ow n ant aid 
of up to £UBm is being sought 


tHTii ■ firm a 







which the UK market has re- 


At£raOm, the issue will be on- 


than £30Qm worth of this is 







era finance that part of 'foe 
damage which Insenmce was 
imllkety to cover. * 

This canid be between £Sm 
and SlAiii. It could be financed 
hr 

• A special fond. 

• Extension at the present sys- 
tem of grants which cover 
glasshouse-rebuilding (about 




Turnover up in three out of 
four Scottish companies 


By RICHARD EVANS 

SCOTLAND’S biggest 
nies show an enconra 


PMC 


geottUi gales - of IKS 
' when nearly Zm cnMc aaetres, 
bftiniher were lost on eadhoe- 


This time iewal times that 

had been tost, he said. He be- 
lieved it canid take three, or 
four years to dasr the tlm- 
bc rj> 

SIB rejects 
unit trust 
compromise 

ByRkhaidWUm 



Mtetov conditions, according that Scotland is an area of 
tothetntfvey: ... 


A NEW METHOD afcafcnlaft- 
tag foie value «f units tn unit 
trusts, proposed yesterday by 
the unit trust industry as a 
compromise to a pp ease City 
regu lators, has fiulea tn deaf 

ptau, Ml ftrorexd by foe 
Unit Trust As s o ciate n. is to- 
tended to allay fern Oat the 

It by movements In shave 
prices to their customers!’ ex- 


ile association's valuation 
method is meant as an alterna- 
tive to a system p to forward 
last month by the Securities 
and Investments Board. The 
SIR’S method, says foe associa- 
tion, would discourage Inves- 
tors from buying *■«•» store 

they wouM not knew tiwprlce 
to the time they contracted to 
bay them. 

But to toast one large 


a m EM 

emthenex 


North Sea activity ‘recovering 


BY LUCY KELLAWAY 
DRILLING ACTIVITY in the 
North Sea has rebounded 
shandy from last year’s de- 
pressed levels and to like ly k 
continue to rise strongly over 
the next five y ears, a ccording to 
a survey of oil company drilling 
i nte ntio ns. 

By 1988, drilling activity 
should have reached the peak 
levels of 1984, an outcome that 
[until now had been considered 
[unlikely by most forecasters, - 
kae- annual survey, earned out 
l by Wood Mackenzie. the Bdin- 
Ibmgh-based stockbroker, says. 

' The survey shows that explOr 
ration drilling to the North. Sea 
has recovered from a trough of 
23 wells in February this yean 
-and is now at its highest .poipt- 


since March 1988. • .. . . 

The broker says, as a result of 
the rise to the ou price thiayear 
to *18 (£105) a barrel, oil com- 
panies are no longer concen- 
trating exclusively on conserv- 
ing. m«1i flow but on building 
rese rves for the fatgre. 

Itnoteathat the industry is in- 
creasingly confident both about 

which 


of August last year, and about 
the quality of drilling acreage 
to the North Sea, after a recent 
batch of encouragtogofl and gas 
discoveries. 

In spite of foeJmprevementfo 
activity, the industry, is Uketyto 
be affected .until the next de- 
cad? by excess capacity. -Wood 


Mfiawide calculates thto over- 
capacity of North Sea rigs is 
running at about ,45 per cent 
thiayear. 

Dadly rig rates have recovered 
to about *17.000 a day-compared 
to an average of $14^000 last 
year, although they axe still a 
fraction of the peak bf more 
.'than $100gQ00 a day reached in 
.Z98L. • 

However, the survey says by 
1992 day rates may have risen 
for enough to encourage new 
riflhto be built Thebalance be- 
tween supply iand- demand in 
tiie. North Sea will also be 


Sea wifi, also be 

helped as some rigs are moved 
to other ptots of the world and 
as older rigS are scrapped. 


BAT* 


BYLYNTON MCLAM 
BRITISH 'AIRWAYS has 
emerged as the "most improved 
airline In the wmrid," In a nxmsr 
of almost 30J0M regular travel’ 
lers from 100 countries pub- 
lished yesterday. 

The former state-owned air-' 
line, privatised earlier this 
-year, was the fifth most liked 
airline. Swissair was the 
world’s favourite, followed by 
Singapore Airlines. Schlpol 
Airport; Amsterdam was the fe- 
vourite airport. 


OBfTUARY 


One third of passengers want- 
ed smoking banned -from fli ghfat 
and the level of 'air fores was 
'the most important aviation is- 
sue for those surveyed. 

The survey was by the Inter- 
national Foundation of Airline 
Passenger Associations. 

• Mr Mike Hoffinan has 
betmappointed chief executive 
of Airship Industries, with ef- 
fort from December 1. Mr Hoff- 
man, 48, was chief executive of 


Bwhcoct International pic from 
1983 until : its recent agreed, 
merger WithFKL 
Mr Hofflmanis also president 
of foe Institution o£ Production 
Engineers and a former chair-. 

iwmti ^fBwMiaWn glTiiML 

Mr Alan Wwtimnrft, maiiiw in rf 
director of Airship . Industries 
and an executive director of 
Bond Corporation Holding*, the 
Airship Industries parent com- 
pany, lsto remain on the Air- 
shipboard. 


First move 
to cut home 
loan rates 

ByNugoDbrnn 

THE FIRST significant move in 
what is likely to be a round of 
mortgage c ute occurred yester- 
day when the Mortgage Corpo- 
jation, the specialist mortgage 
lender, announced a reduction 
in its mortgage, rate from U-l 
per cent to KL5 per cent 
The rate takesefibrt Immedi- 
ately for new ‘borrowers and 
frtim December ! for exis t in g 
borrowers. It follows the cut to 
base rates from 10 per cent to 
ns per cent during last month’s 


Building societies and other 
'mortgage lenders are likely to 
follow Mortgage Corporation’s 
move to maintain their competi- 
tive positions. However.there is 
uncertainty about the tuningof 
their response in view of contin- 
ued volatility in the money mar- 
kets. 

*We it is important to 
price our mortgages keenly, but 
we are waiting to see a more 
settled situation," said the Hali- 
fax Bunding Society. 

Because of the expense rtf 
sending out hnndreds of thou- 
sands of letters to borrowers, 
societies want to be sure of the , 
.rate- they choose. If base rates 
j fell further, there woul d be th e 
lopportunity to cut mortgage 
rates by a larger am o un t 


Celltech made 
£234,000 after 
tax last year 

CELLTECH, the biotechnology 
company which is embarking on 
a multi-million pound private 
placing, has recorded its first 
profit After-tax profits to the 
year ended September 30 were 
£234400, compared with a loss 
of £2. 08m the previous year. 

Mr Gerard Fairtlough, the 
chief executive; said: "Profits 
’ from the sale of products and to 
our sponsored- development 
busi ness increased to £4. 11m 
• from £787,000." 

The costs of developing the 
blopharmaceutical business in- 
creased to £&45m from £2J8m, 
[ leaving an operating profit of 
, £661,000 compared with an op- 
. crating loss of £L79m to the pre- 
„ vioua year. Turnover rose 80 per 
cent to £1.1.41 m from £7.6m. 


foe valuatSM to based on share 
■■ires at midday. The tedtt-in 
allewa aw- 
agers to deal in fodr own units 
wtfo foe benefit of knowledge 
about what has happened to 

Share prices to foe meantime. 

Instead, according to foe 
MB, managers should rely art 
a price after a reqnrat to buyer 
sellhas been received ■ 

The association’* ca mpn- 
mise involves setting a wto 
before deals are de na,.b ut 
bared cm share juices eanr In 
*i— morning' 

MAb, me largest unit treat 
group, said looter tot 
seno 45 per cent of Ba touri- 
■ess comes directiy Irem fo- 
resters who da not too* *he 
mice of units titer an baying. 

The SIB plans to finalise the 

legulationTvrtib* take 

effort In April, before flu end 

ef this year. 


Lord Cobbold: Governor of Bank 


LORD COBBOLD, Governor of 
(Kn Itimlr qf Bnglmd to foe 
post-second World War yean, 
died on Sunday aged 83. He had ' 
a long career at foe Bank, where 
he was singled out at a young 
age for high office by the Gover- 
nor at the time, Montagu Nor- 
man. However, his public im- 
pact was dolled by bis strong 
belief that the Bank should 
keep out of the news and poli- 
tics. 

Yesterday, former colleagues 
described him as the epitome of 
the old-style governors who 
Britain’s ft nonrial - 
system from behind the scenes 
with a firm but understanding 

hand 

Educated at Eton and King’s 
College. Cambridge, Lord Cob- 
bold joined foe Bank as an ad- 


vfeer to 2933 and was one of foe 
first four executive d i rec to rs 
appointed in 1938. In the Sec- 
ond WoridWar he administered 
the sterling exchange control 
accounts, after which he served 
briefly as deputy governor be- 
fore becoming govern o r in 1910, 
a post he held for 12 years. 

.. His main duty in the 1950s was 
to aid Britain’s adjustment to ita 
haw postwar 1 circumstances 

when sterltog*s international 
importance had outlived the 
country’s power to support it. it 
was also a time when monetary 
control was r ev ive d as an in- 
strument of economic manage- 
ment 

Lord Cobbold served under 
four different governments and 
six chancellor but, through a 
combination of tact and great 


personal authority, . maintain^ 
constructive relations with all 
of them. He- was. also for ; 12 - 
yeara a director of the Bank for 
latemational Settlements,, 
based in Basle/throogh which'- 
he established his reputation 
oman international plan& 

The final years of his gover- 
norship were marred by foe al- 
legations. of a bank-rate leak, 
mwJ the establishment of 
Radcliflfo Committee on foe 
workings of the monetary sys- 
tem. The Bank was cleared of 
any serious lapses but some 
changes were made to its work- 


Lord Cobbold was foe last 
Governor to be specifically 
trained for the job and he culti- 
vated a certain aloofoess to en- 
hance tiie dignity that he be- 



lieved to be a vital attribute of 
the office. However, he pos- 
sessed a sharp . intellect and *■ 
personal -warmth that inspired 

widespread loyalty and confi- 
dence. He wra a fkm believer m 
the value of a brisk walk to •&- 
vanee deadlocked talks. 

After retiring from the Bank 
he served as Lord Chamberlain 
and accepted a number of dir 
rectorships, including those of 
BP and Guardian Royal Ex- 
change. He was active in the 
House of Lords, where be speci- 
alised to European Community 
law. 

He had been living at his tarn- 
Sly home at Knebworth, Herts. 
He is survived by his wife Her- 
mione and three children. 
David, Snaan and Rowland. 





l 


if 


S 










FIRST CHICAGO 




the ^rcn. 


Ejnancial Times Tuesday November 3 1987. 




dr 

Sft. 1: ■*' 


Its no wonder. A bnef iookat our recent per- In currency and interest rate 

In everything we do, from formanoe in foreign exchange options; its $7 billion, 

trading to investment lx king to trading and risk insurance is proof And for interest rate and 


of technique and creativity they 
just couldnt find anywhere else. 
The fact is, First Chicago is a 


corporate finance, we're the kind of Our annual customer volume currency swaps, its nearly $8 billion, major global player in these areas. 


bank people want on their side 


in the area of foreign exchange is We got this big this fast by A player you should want on 

in excess of $330 billion. offedng our clients a combination your side. 


h •« . 

i r z-.\' l. y .‘ 


■ s. 


r. s 


.. v ;„ . 

i* -i ; ■ 


First n 
to cut he 
loan rafe 


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►s *‘ 4 ' ’ 

.1 1 — i ■w 

*:■ ’■«■*** 
... ■■ • 


• ' t 'fi'-iir*: 


NOT MANY PEOPLE 
LIKE GOING UP AGAINST 

CHICAGO. 


CVlltfcci* 

£iuoW‘ 

• t;U bSt« 


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nk 

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UK NEWS 


Magnet calls in 
police over 
possible fraud 


IPC to spend £2.5m on launch 
of monthly women’s magazine 


BY DAYS? WALLER 

WEST YORKSHIRE police are 
investigating a possible fraud at 

Magnet, the kitchen and bed- 
room fimutnre maker and re- 
taller based in Keighley. Mag- 
net said yesterday that 'several 
hundred thousand pounds* 
were involved. 

This comes as a farther blow 
to Ma g n et, which in late August 
lost a quarter of its market val- 
ue in three days alter two stock- 
brokers downgraded their prof- 
it forecasts for the current year. 

Officers from the Bradford 
fraud squad were called in by 
Magnet last month after an in- 
ternal auditor stumbled on 
what Mamet rail ed an "unusual ' 
relationship” between a direc- 
tor of a Magnet subsidiary and a 
supplier of computer equip- 
ment The director has since 
been dismissed. 

Mr Gordon Brown, Magnet’S 
finance director, said that the 

former director owned a compa- 
ny that purported to act as a 
supplier of computer accesso-. 
ties such as printers and 
printed-circuit boards. As a re- 
sult, Magnet was overcharged 




alleged fraud began. However, 
Mr Brown said the loss to Mag- 
net appeared to be limited to 
"severd hundred thousand* and 
he was hopefol of recovering 
the money. 

Detective Inspector Marshall 
of the Bradford fraud squad 
confirmed that his officers were 
investigating the circumstances 
in which one of the directors of 
Magnet Joinery and Timber, a 
wholly owned subsidiary of 
Magnet, conducted the pur- 
chase of equipment on behalf of 
the company. 

. No charges have been 
brought as yet but the police in- 
tend to submit their file to the 
Crown Pr ose cution Service. 

Magnet has in the last flew 
years been re-orienting itself as 
a retailer rather than a supplier 
to file building trade. That strat- 
egy seemed at first to promise a 
fort rate of growth and the com- 
pany's shares rose from 280 p to 
more than 400p during the first 
half of the year. 

The shares now stand at less 
than 200pu Analysts expect the 




BY RAYMOND SNOOD? 

IPC MAGAZINES yesterday an- 
nounced what is claimed to be 
the biggest launch in its history 
- Essentials, a monthly women's 

.magazine. 

at the B ^TctfJan^ 7 ^«^ # a 
£Z5m campaign, will toy to com- 
bine the traditional fore of 
I ‘women’s magazines with practi- 
cal reference information. 

. The first Issue will come with 
a ring binder and set of refer- 
ence cards. Each issue ofEssen- 
tials will have 48 ready punched 
file pages on topics ranging 
from health and cooking to 
household tips. 

The magazine will be seen as 
IPG’s counter-attack on Europe- 
an publishers who have 
launched titles on to the British 
women's m ag az ine market over 
the past 12 months. 

Jh September 2586, Gruaer 


andXahr, part of the Wert Ger- 
man. Bertelsmann group, 
launched Prima, a monthly now 
selling more than In copies. 
The company has since fol- 
lowed it up with a weekly. Best 

Mr John Mellon, chief execu- 
tive of IPC Magazines, part of 
Reed International, denied, yes- 
terday that thetounch of Essen- 
tials was a reaction to Prima 
anH raid the IPC magazine had 
been conceived "ht around the 
same time.” 

Mr Mellon added: *We were 
certainly not prepared to be 
panicked into doing something 
and rushing into the ■"«*»< 
with a competitor. We wanted to 
offer something that was really 
substantial and get it right* 

Essentials, which will be pro- 
duced editorially for IPC by GE 
Publishing^ designed to com- 
plement ZPCs five main wom- 


en’s mag a line s - Woman, Wom- 
an’s Own, Woman's Realm* 
Woman’s Weekly and Woman 
and Home. 

* Essentials, which will have a 
cover price of 83p, will have n 
launch print mm of more than 
700,000 and ndvertiaqra are 
guaranteed a. circulation of at 
least SOOflOO -for the first six 
months. 

Mr Mellon said yesterday that 
IPC MagBitinw had sold 4.8xn 
more copies between January 
and June this year than the 
same period last year and that 
"very good results” -were expec- 
ted for the July-December cir- 
culation period. 

" "In the year to June, IPO’s eon- 
-aurner magazines had a turn- 
over of £L88m and a trading 
profit of £ 20 4m. 


Controls 
sought 
on record 
rentals 

n rnu mnrtl jim d dy 
. lflSMtmSH roeaidlndusfry 

plans to jema foe Government 
'.tojrifo the rest- 

ing at records and compact 
discs m restricted act oin 
new-cspyrirtUIegtsIsfiaa. * 

The British Phaugnpkte 
IntnstiyCBPD, the body repro- 
sesting mast rights’ owners, 
h op e s that ■ amndne ti wfll be 
pat dawn in the Lords after the 


• Financial Times Tuesday November 3 1987 


Employment ‘down 
37% in Coventry 
over last 20 years’ 


BYANDREWTAYLOR 
EMPLOYMENT in Coventry, 
-once one of Britain’s richest 
fall- 
en by 37 per cent in the last 20 
according to a survey of 


12332SSS 


hut still about 25 per cent lower 
than the national average. 

"Coventry is still very largely 
about making things. This re- 
mains true despite the dramatic 


gassES 


1 1 a m 


a&rigi : 










iaacj 


ririiVr'M'lt 




w£C3 




Sardines under Earls Court 



• ■ ■ — 

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'«• ’ 

.f; *'.“•* - ** , 

i . rt* *..?:•? -*• ; • • - 

I , ; v V ‘*v <•/". ’ * ' ' ' s ‘ • 

^ v • - 


or lobster over Paris? 


Why take the tube when you could be taxiing? 

Brymon Airways Citydass service from London City 
Airport saves an hour cm a typical journey from the city to Paris. 

It saves a few nerves, tempers and suits from fraying too 
because London CSty Airport is in the heart of the Docklands, 
only 6 miles from the Bank of England. 

With an advantage like that it may seem strange that each 
flight will only have 46 passengers. But more people would mean 
a much slower service with a much longer check-in queue. 

As it is you can check-in just 15 minutes before take-off! 
And itfe not a marathon walk to the plane either. 

In the ah; Cityclass offers a standard of service rarely seen 
on short flights.The menu features some superb lobster, lamb and 
smoked salmon to rival many restaurants, from London to Paris. 

The cabin staff are as friendly and efficient in French as 
they are in English. They’ll even radio ahead, during the flight. 


for a taxi or hire car to meet you at London City Airport. 

By joining Brymorfs Citydass Club you can enjoy the 
same special attention on the. ground too.;Ljke exclusive 
.membership of London City Ahportk only executive lounge. 

At Charles de Gaulle Airport, thanks to an .agreement with 
Air Ranee, all Cityclass passengers will use the quicker and 
quieter Terminal 2, with their own check-in desk. 

Brymon’s six daily flights are also ideally timed for the 
business traveller. So fly Citydass to Paris and while the others 
are on their way to the airport, you’ll be orryour way. * 

. For reservations contact your travel agertt, or telephone 
Biymon on linkline (0345) 717383 or Air France on (01)4999511 

' ~ /O TB nmon ^ V' ■ ' 

CITYCLASS 




foifl?r, r TTr?HrTr. ? Sfffffntf : n flu 



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■I iM 




The most 
prestigious 
Watch Sale 
i n Lon do n 

■ X :lxv fx to 50% dfectKl&t ' 

- ^tihsfeiected tnodels of \ ' 

. ■ ' 7 ; ; - pia^eC Raumeand Mercler. 

, Concord Audemars Piquet. 

. Vacberon Constantin and 
."Van Cfeef & Arpeis 
Watches 

' ATI rwJuctia» Irani previous prices. 


via mnrn 

Baume and Merrier Showroom 
38 Conduit Street. London Wl. 
Telephone 01-493 8182 




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Kaancial Times Tuesday November 3 1987. 


15 


When VF Corp- 
acquixed Bhie Bdl 
Holding Go., Ixk and 


in the largest merger ever exe- 
cuted in the «pp*xd Industry. 
Bankets Trust initiated this 
$762 million t ran sac ti o n and 
was financial adviser to 
Blue Bell. 



Bankers Trust. 



The stakes are high in acquisitions and 
divestitures. Every move you make has far- 
reaching consequences. 

That’s why ids critical to have a 
world-class financial advisee And 
why, for more and more major 
cpn^ that financial \ 
Sadyfeeris Bankers ’Rust VL 
. * ’What distinguishes ' 
Bankers Trust from other 
advisers? 

Rrst,itk the involvement 
of our senior professionals at 
every stage of a transaction. Just 
as the transaction commands the 
attention of your senior people, it com- 
mands the attentionof ours. And with them 
come years of experience in both industry 
and investment banking. 

Since 1986, Bankers Trust has served as 
finandal adviser to dozens of companies. We 
have successfully arranged transactions as 
varied as the sale of Group Lotus to General 
Motors, an acquisition for Reuters Holdings 
FLC, the International Leisure Group buyout 


all participants. And our responsiveness to 
client needs has earned us a reputation for 
moving with unusual speed. 

Providing finandal advice is not the only 
activity at which we excel. Our merchant 
banking approach to doing business, coupled 
with our worldwide client base and capital 
^engt^glv^ over traditional '-T-; 

institutions in many areas. Among them: 

Management buyouts. As a leader in 
structuring and arranging the financing for 
management buyouts. Bankers Trust can engi- 




ard and Union Carbide. Our workkclass 



many clients for multiple assignments. 

A world-class adviser must also have 
worldwide capabilities* Half of our 1986 and 
1987 transactions Have involved at least one 


the senior debt. 

Eurosecurities . Bankers Trust is a major 
force in the Euromarkets, having lead-managed 
51 Eurosecurity offerings to tallin g $7 billion 
last yean We are one of the most active 
participants in the secondary market, 
where we are a market-maker in over 
600 different Eurosecurities. 

Private placements. Bankers 
Trust completed the private 
placement of $5 billion in 
corporate debt securities, 
master notes and 
medium term CDs 
in 1986, putting us 
among the leaders 
in this form of 


Premier Brands l i mit ed 
was formed to accomplish 
the management buyout 
of Cadbury Schweppes’ 
beverage and food group— 
the second largest MBO in 
die U.K. last year. 

Bankers Trust acted 
as fiwanfial adviser to t4w 
MBO team; structured an 
amortizing interest rate cap 
and jointly provided £75 
millkxi of the debt 



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Financial Times Tuesday November 3 1987 


Pity the poor 
pension scheme trustee... 

As a busy uusfcc you maty find youndf asking ihc foBowing quesUooc 

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• Wffl rnyfnrvt manager keep mein touch wghbQW the HvertmentS arc 
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• Valuations? 

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• Is otc fund management icmi enough -orsbouidlliBVttwoorBXVci 

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The lisi goes on. One thing you can be sure of i* that they wffl n ten yew 

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Town and shop 
centres ‘should 
be run jointly’ 


UK NEWS __ 

Steve Fidler takes a trip to Paris from London’s Stolport 

Chocks away at the City Airport 

. . ...i , - PTMumabiy flyihS lov 


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developments that you will need to know about. 

STATISTICS 

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yourself how cadi fund is p e r formi ng. And we cany a major survey every 
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MONEY BACK GUARANTEE 


BY VftLLMII COCHRANE 

BRITAIN’S shopping centre in- 
dustry yesterday put forward 
urban regeneration measures 
which, if combined with the 
Government’s own inner cities 
Initiative, might lead to 
far-reaching changes in the 
management of town centres. 

At the inaugural annual con- 
ference of the British Council of 
Shopping Centres in Bourne- 
mouth, Mr Leonard Jarred, se- 
nior partner of chartered sur- 
veyors Hi tiler Parker and 
president of BCSC, introduced a 
policy document saying that 
town-centre managers should 
be appointed to dovetail shop- 
ping-centre management with 
the needs of the town as a 
; whole. The town-centre manag- 
ers would extend the existing 
concept of shopping-centre 
managers. 

The new managers would conr 
trol and influence the operation 
and maintenance of the town 
centre; co-ordinate public 
works; involve public and pri- 
vate organisations in thfe envi-_ 


ro omental control' budget; de- 
velop the "corporate spirit" of 
the town centre; promote the 
town, and develop its tourist po- 
tential 

He or she would deal with and 
co-ordinate bodies such as the' 
police, traffic management, 
chambers of trade, public trans- 
port and planning control, high- 
ways, landscape, street- light- 
ing, and cleansing services- 

The British Council of Shop- 
ping Centres public affairs com- 
mittee, which prepared the pol- 
icy document, says Britain’s 
traditional high streets and 
planned town centre shopping 
schemes are under threat bom 
out-of-town and edge-of-town 
shopping centres. 

The committee says that many , 
traditional British high streets : 
are drab, squalid, congested, . 
wet and draughty. 

"It would be to the benefit of 
retailers, developers and local i 
authorities", says the commit- 
tee, "to provide increased com- | 
tort, security, cleanliness and i 
pleasure tor shoppers." 


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Consumers ‘ require 
new protection act’ 


BY DAVID CHURCKLL 

LAWS TO protect consumers 
from rogue traders were called 
for yesterday by the National 
Consumer Council in response 
to Law Commission recommen- 
dations for r e form of the 1879 
Sale of - Goods Act,wfaich re- 
placed earlier legislation. 

Mrs Sally Oppenhebn-Baxnes, 
council chairman, said: "We 
should tear up this act. which 
h«« remained basically un- 
changed tor almost 100 years, 
and start afresh." 

The former Minister for Con- 
sumer Affairs went on: "A brand 
new law to protect shoppers 
when they are .sold faulty goods 
is urgently needed." 

She said die way courts were 
interpreting printing laws was 
taking away from consumers 
their fundamental right tor a re- 
placement or reftmd if floods 
were faulty when- bought or 
soon after. 

"Nothing is of more overriding 
importance in consumer affairs 
today than to restore that ele- 


mentary ri 


-monrig of sim- 


ple, understandable and en- 
forceable Legislation - a | 
completely new Consumer 
Sales Act," she said. 

The council seeks other rules 
to govern motor-vehicle sales, 
like the so-called "lemon laws* 
in the US. Those laws guarantee 
refUnds or replacements if con- 
sumers buy a so-called "lemon", 
that is a faulty vehicle that can- 
not be promptly or efficiently 
repaired. 

Some say the UK needs such 
laws even more following a re- 
cent court case in which a mo- 
torist was told he was not enti- 
tled to a retond when a new car 
with a faulty engine broke 
down. 

Mrs Oppenheim-Banies said: 
"This was an outrageous deci- 
sion which has made a non- 
sense of all the advice given in 
good faith by consumer bodies 
and lawyers over the years.” ' 

The council says the Law 
Commission proposals do not go 
far enough. 


THE TAXI driver's decisiveness 
had evaporated quickly. Asked 
to make his way to the new. Cit^ 
Airport, where in one hour I 1 
was due to take off for Paris, he 
headed eastwards with convic- 
tion. Two minutes later, he ask- 
ed meifl knew where it was, 

Ts it off the SilvertownRoad?’ 
he ventured. I~was unable to 
help, my East End geography 
being only slightly superior to 
my knowledge of lunar topogra- 
phy. 

A conference with another 
cab driver outside the Bank of 
England established that Sil- 
vertown Road was indeed our 
destination. Even committed 
E-ftgt Enders. one Imagines, 
would own that the taxi ride 
that followed would be no can- 
didate for the Scenic Tour of 
Britain competition. 

Sociologists might disagree. 
The old East End sits cheek by 
jowl with the new; decaying 
Victorian terraces next to the 
i post-modernist homes' of the 
newly rich with the benefit of 
better views over a muddy river. 

The journey takes ns past the 
high-rise blocks of the 1960s, 
dwarfing a solitary two-storey 
! end-of-terrace house, converted 
into a pub called The House 
They Left Behind, then past 
ranks of disused cranes ana the 
Royal Victoria Docks. A sign de- 
clares ’Demolition Works in Ad- 
vance of Infrastructure Works’. 
The airport Is tit op like a vast 
sports field. 

It took 40 minutes fron Can- 
non Street, in spite of the traffic 
that clogs the narrow streets at 
that time of day, and cost £13 in- 
cluding tip. 

At *the airport, the atmo- 
sphere is less frantic. One en- 
ters a cavernous bunding where 
a score or so of people are wan- 
dering around. It presents a 
stark contrast with Heathrow - 
if you like your airports fren- 
zied, this is not for yon. With or 
without luggage, passengers can 
check in 15 minutes before de- 


- * ~ ■ presumably flying lower has 

S \ / Its disadvantages - being no avi- 

f ti-m A X n ation expert I was unsure 

[STOW] f ‘ 1 whether flying at 13,000 ft meant 

xt i 1 ml -. \ \. IlowST”! T we were in. under or over the 

''■'Trt stolport tt n weather. However. paW-up 

^ \ \L\ \ "U LJl-ari members of fte White Knuckle 

. \\ \ j. 1VL^_ . \ ii [I Club will be pleased to hear 

\\ ' \ \V ^ that in the absence or much 

■V \ weather, the flight was extreme- 

^Tberearedxawbacks. One is a 

. n 1 1 I \ \\y y phenomenon known as tray 

Itower I | o> i \ \ ^ creep. This is when the ribra- 

l 8 ** 11 **^ 11 III ~IX tions of the plane result in the 

\ \ | i I gradual movement of food trays 

\>w/ J -towards the edge of the tables 

and the laps of passengers. 

^ These are of course but tri- 
tparture for the fli ghfa to Paris - Four huge propellers are fles. The l an d in g in Paris was 
there are six every weekday - sited on engines that hang be- uneventtoL and we were there 
and, in spite of the uncertain neath the wings. Of the 46 seats, jn 65 minutes, 15 minutes earli- 
start, 1 arrived with 20 minutes all but 10 are taken, most of er than scheduled. Through un- 
to soare. them by businessmen who judg- migration and c us t oms , we were 

ni ■ i_. .. , _ . . a .J.*.., vn.turfal tko arrival Knilrl intr at 




TOWWH 
BRIDGE I 


fpartnre for the flights to Paris - Four huge propellers are 
there are six every weekday - sited on engines that hung be- 
QTiri in enito ftf TinAArffliM mhath tliO tinnm Hf thfi 46 SC&tS. 


to Spare. them by businessmen who ]uag- 

.The newest international air ing by their reading material 
service from the UK - it started are British rather than French, 
a week ago - displays an air of The engines strike up one after 
an era one imagines existed be- the other and we are already zn 
fore airline passengers became motion, after leaving precisely 
a commodity. Perhaps part of on time, before the third and 


me aupori mbu sou auuae ca- propeuen »pu> iw*™, 
ployees had not yet been sub- plane judders, the brakes are 
jected to the pressures that released and it accelerates.. Af- 
harden the countenances of ter a few moments - this is a 
many of their counterparts at short take-off and landing air- 
the other London airports. port - we are airborne, heading 

Yet, in the modest departure east The aircraft banks right 
lounge, it was rather pleasant and through the starboard port- 
when the loudspeaker system hole, in the direction of the set- 
apparently broke down and a ting sun, a lone water skier cats 
young woman, barely audible through the placid waters of a 
because of a frog in her throat, disused dock, 
announced time for embarks- Over the river, it is only min- 
tion. ntes before one passes the M25 

The atmosphere was not bro* London ring road, a ribbon of 


migration and c us t om s, we were 
outside the arrival building at 
Terminal 2 at Charles de Gaulle 
Airport 70 minutes alter take- 
off While there is more time In 
the air than on the competing 
services from Gatwick and 
Heathrow, that must be bal- 
anced against time savings on 
the ground. Non-members of 
the White Knuckle Club may 
well find there is enough time 
airborne to get some work done. 

The general view of other pas- 
sengers appeared positive, too. 
’Much better than I expected,' 
said one apparently seasoned 
traveller to the cabin staff 

Two other passengers - from 
British Rail’s engineering sub- 
sidiary - also enjoyed the night. 
Loyal clients of their employ- 
ers, though, they bad decided to 


non. ntes Derate one passes me uw ers, tnougn, tney nau aetuueo io 

The atmosphere was not bro* London ring road, a ribbon of i»Itp the train to Silvertown and 
ken by walking out on to the as- moving lights as far as one can were forced to walk over what 
phalt and np the steps of the see. In the daytime, presumably they described as a building 
aircraft. The Canadian-built De most of south-east England is site to get to the airport 
Havilland Dash 7 is the only air- visible. That problem should be 

craft Brymon Airways is permit- The aircraft does not fly as cured fairly shortly, although it 

ted to use from the City Airport high as jets - we were over the sounds no journey to make with 
because it is so quiet However, Fnglfoh Channel before we a heavy suitcase. Eventually, it 
many of the people who live reached cruising altitude of js hoped that the docklands 
nearby apparently believe it fa 13,000. That means, on. a clear light railway will be able to de- 
only a matter of time before no- day, good views out of all the liver passengers to the airport's 
isler jets are allowed. - windows. - doorstep. 


Truck market ‘faces 60,000 sales ceiling’ 


BY JOHN til UTI IT U S 

THE UK truck market is likely 
to perceive 60,000 sales a year 
as a "high-water mark" for years 
to come, Mr Richard Ide, direc- 
tor of MAN Volkswagen, has 
told a meeting 'of the company's 
dealer network. 

"In my opinion we shall view 
60,000 as a high-water mark not 
; just because of any lessening in 
demand, but- because the road 
.'transport industry is coping 
I with its traffic with remarkable 
I improvements in efficiency". 


said M/- Ide 

Improved trucks with higher 
payloads, and better utilisation 
by operators meant that "in- 
creasing numbers of vehicles 
hardly -ever cool dowp", said Mr 
lde. 

The UK market for trucks of 
more than 3.5 tonnes gross 
weight peaked in 1879 at 80,000 
units but dropped to a lowest- 
ever 45,000 units in 1982 after 
the second oil crisis. 

At that time, MAN Voikswa- 


famine and feast The growth 
:has been modest, but sus- 
'tained.' 

, Mr Ide said that trucks pro- 
duced by MAN, which are mar- 
keted in the UK by MAN Volk- 
swagen, had secured a 4 per 
cent share of the market com- 
pared with L9 per cent five 
years ago.' He forecast that over 
the next five years, MAN could 
secure higher shares - of up to 
13 per cent - In some specialised 
market areas auch as eight- 
wheelers. 


gen forecast that the market 
would recover to reach at least 
65JIOO units in the current year. 
However, the market has 
reached only 55,000 units in 
.each of the past two years. Sales 
totalled just under 44,000 at the 
end of the first nine months of 
the current year. 

However, what appeared to 
have happened, said Mr Ide, 
was that "for the first since 
World War Two we have broken 
oat of the debilitating cycle of 


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Air n r 




POh 


Financial Times Tuesday November 3 1987 


-ADVERTISEMENT 

Investment 


I 17 


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•r»:- V- 


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1 »;• * ;* 
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Some coins more equal 
than others 

LONDON, IS. October. The multi- 
tude of coins available today places' 
many a novice in a quandary. They are 
offered in all sizes and designs, and at all 
price levels through adsin the dailys oral 
banks or coin dealers. . '' 

Caveat emptor. Not aHthatglitteisis 
a coin, Baacally, there are fivetfiffereat 
types. 

1. Bultten Investment Coins. Gold buP 

lion investment coins are sold solely for 
the intrinsic value ofthe precious metaL 
They are pro du ced in large numbers by 
major gold producing countries, such as 
Canada, Australia and U.&, thus are 
traded at a small pr emium over the ate-, 
tnal price ofthe metaL Astheyareapure 
investment vehicle, like gold bats, they 
have no numismatic value. They are 
favored over gold bate by investors as a 
dote value, as they are more transport- 
able and easier to trade. The value • is 
easy to keep track o£ as their price is 
baaed upon the daily fixing of gold. . /. 

2. N umismat ic Coins. In general, these 
are coins which are bought by collectors 
for their beauty, as opposed to the value 
of their precious metal content How? 
ever, a truer definition would include 
those coins struck prim to 1804/ The 
price has no relation whatsoever to- the' 
actual valneofthemetaL The factors d&- 
terminlng the' price of a coi n^trejy ity, ! 
age, and condition 




3. Scnrikinmiinnsllc Gain. These are 
coins that were struck after 1804, how- 
ever prior to 1850. The same criteria as 
those .used with numismatic coins are 
used. in determining' their value. The 
buying and selling of one of these coins 
is, however, easier since they are avail- 
able in greater quantities than those 
stn«± prior to 1804. / 

• *’ i* 

4. Cmreui Cotas. Current coins are those 
struck after 1850 and were in circulation 
during the time of the gold standard. 
-Tbere-are still large quantities of these 
coins available today. The price is relat- 
ed to their gold content plus a fairly high 
agio. 

The .collecting of rnrnif«in«K<» and 
■ semi-numismatic coins can also be con- 
sidered a form of 'investing, however 
usually it. is merely a rather expensive 
hobby. Current corns fell into a category 
between hobby amflfurestmenl, since 
they. also maintaii^ ^^^glue. even if 
the price of |m i Ti^ffplf8|r|Timi1il falL 


Gold Maple Leaf makes a breakthrough 

World’s gold coin standard / Grows in popularity / Even attractive for small investor. 


5. Medaffitms. 1 ' 


feocol- 


OTTAWA, 15. October. Gold, prized 
as a store of weal tb over the ages, has not 
lost its shine even in the age of high 
technology and cashless transactions. 
This has been felt recently by the Royal 
Canadian Mint. According to a spokes- 
man for the Mint, demand for the Gold 
Maple Leaf, the Canadian gold bullion 
coin which is struck in four sizes, has 
recently been brisk. Observers of the 
fioandal world contribute this to various 
factors. The primary reason is felt to be 
its universal recognition which ensures 
ease of trading wherever gold is sold 
around the worid. Of almost equal 
importance is its unusual purity of 3999 
or 24-carat. Most other gold coins rarely 
exceed .916 or 22-carat, the purity of the 
South African Kru g e rran d (which is no 
longer being produced).. 

A further aspect is that the Gold 
Maple Leaf is legal tender in a country 
known for political stability and for 
being a dependable trading partner. 
Since the coin is easily convertable 
currency, it is sold in most countries 
free of a value added tax. This is 
true in Luxembourg, Switzerland and 
Austria, while a minimal tax is charged 
in Belgium (1%) and Holland (4%). 

Since the Gold Maple Leafis struck in 
Aursizes, it is able to satisfy the varying 
needs of all investors. It is 
full troy ounce of pure 
1/4 and Vio ounce of 
7 • / ’ ■-?? \ ^Bhes the coin attractive 



the benefits of owning gold. The Gold 
Maple Leaf, which has been available 
since 1979, is produced only from gold 
mined in Canada. 

This accounts for its unusual yellow 
color compared to coins mixed with 
alloys. The use of Canadian gold is a 
requirement of the charter Of the Royal 
Canadian Mint and it serves to support 
the Canadian mining indiwtry. Gold was 
first discovered in Canada in 1858 and 
has been continually mined ever since. 
Canad a is currently the third largest 
producer of gold in the worid. 

This objective is dearly being ful- 
filled, as indicated by sales results of the 
Canadian coin. Since its introduction in 
1979, over 10 million Gold Maple Leaf 
coins - that’s over 300 tons! - have been 
sold around the globe. The biggest jump 
ca m e in 1985, when sales doubled. This 
was caused by a favorable price of the 
precious metal and an increasing in- 
terest in this bullion investment coin, 
following the demise of the South 
African coin. 

Why do more and more investors 
prefer bullion coins to its cousin, the 
gold bar; or wafer as it is sometimes 
called? One key reason is their liquidity - 
a coin exyoys universal recognition and 
cazft be counterfeited. Gold bars may 1 
eqjoy a solid reputation in their local : 
market, however usually require 1 

and time-consuming assay in otherpnin 
ofthe worid. Gold bullion coins a^ 
governments, whuMB 
v flkJlBBMMight 


respect, the Royal Canadian Mint is 
especially strict Although the purity of 
each Gold Maple Leafis given as .9999, 
it is actually closer to 39995. The 
weight on each coin is strictly con- 
trolled, with the weight struck on the 
coin being a mfanmum guaranteed by 
the Government of Canada. Independ- 
ent tests have even shown that the coins 

are aQ above the minimum, showing that 

the Royal C anadian Mint gives a little 
gold away to ensure they meet the 
guarantee. No other coin has yet to 
show similar results. 

It is fair to point out that a gold coin, 
and a bar for that matter, provides the 
owner with no interest However, it 
can be still considered an investment 
instrument butfor other reasons. This is , 
because it is a speculative object But 
more significantly, gold has beep proven ' 
over time to be the surest store of value. 
Gold bullion coins will not multiply but ! 
as the saying goes, they bring peace of . 
mind. They can anchor a portfolio that is 
made up primarily of more speculative 
instruments, as they will gain in value 
when others are losing theirs. Inflation 
and economic crisis only eat up other 
investments, while feeding the value of 
gold. That’s why most experts agree that 
10 to 20% of a portfolio must be in gold#j 
An ideal way to keep this golden 
with Gold Maple Leaf bullion<^^^M 
With no guarantee of the fofr .. 
jjjgggpmy, it is comforting t/ : '7;S§J 
WtllftegDty and weight araSfflk- >' 1- 


Investment 
can also be beautiful 

FRANKFURT; 15. October. The 
Royal Canadian Mint created not only ft 
major bullion investment coin, but also a 
coin recognized and appreciated around 
the world for its beauty. Although this is 
not the main criteria in choosing an in- 
vestment instrument, many find added 
value in the quality of the design and 
striking. 

As with all Canadian currency, 
the front depicts the effigy of Queen 
Elizabeth II, reflecting the historical 
relationship with England. The reverse 
side shows the symbol of Canada, a 
maple leaf, which has been captured to 
perfection by the engraver. 

Prominently displayed are also the 
key facts about the coin, such as its 
origin; value (either $50 Cdn, $25 Cdn, 
$10 Cdn or $5 Cdn); weight (either 1, 
1/2, 1/4, or Vio ounce); purity - .9999; and 
date ofstrikingIThe first coin was struck 
in 1979. 

One Eagle 
that doesn’t fly 

FRANKFURT. IS. October. Ano- 
nymous sources in banking circles 

K , Zurich and London 
the U.S. Eagle is not 
tme level of success in 
is in Its home market, 
investor continues to 
iitional gold products 
1 bars or the better 
Gold Maple Leaf, 
at less popular coins 


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Souica: HandeMMi 


Cavelti “Time-proven investment” 


Since the price of gold was freed in 
1970 to move with market forces, it has 
risen to new heights, and.feUen just as 
often. 

Precious metal and finance experts 
flfmtfiwflity try to analyze the price 
development But, the gold metal re- 
mains unpredictable. Rising or falling 
dollar exchange rates, wars, and finan- 
cial crises are no longer a guarantee fora 

rise in the price of gold. 

The peak in the price of gold was 
reached at $850 for one ounce in 1980. 
Currently, the price ranges between 
$400 and $500. In spite of this, invest- 


ment advisors recommend to follow the 
golden rule - hold ten to fifteen percent 
of an mvestmentportfolio in gold. 

- The.- reason is simple, explains 
Peter C. Cavelti, President and Chief 
Executive Officer of Cavelti Capital 
Management Ltd. in ToronX, Canada, 
and an internationally recognized 
expert on precious metals:. “Gold Is an 
unbeatable investment vehicle that pro- 
tect prosperity at all times/even during 
crisis” Cavelti has banking-experience 
in U.&, Africa and Asia and belongs 
today to the most souglb-after precious 
metal advisors. 


portfolio. The question is 
best way to own gold?. 

.The dunce between bullion^lo|ill 
bars, certificates or a precious motti 
account depends upon the wa n ts and! 
needs of the individual investor. In 
addition, such aspects to consider are 
the availabilily ofgold, the possibilities 
for resale and also personal taste erf the 

ultimate owner. 


Weight and Purity. TraifitianaHy, the gold 
trade has dealt in troy ounces - one troy 
; ounce equals 3L1035 grams. Today, 
however, the metric weight system is 
also accepted and used, thus gold is 
available m grams, kilos and tons. 

Ofparticularimportance is the purity 
Or fineness of the gold. With small bars, 
or wafers as they are sometimes called, 
and the leading bullion coins, such as 
tbeGold Maple Lea^apudty of .9999 is 
sozmaL This means thatthe given piece 
contains no more than one ten thou- 
sandth of foreign matter. However, it 
realfr means that a greater purity is not 
possible nor really necessary. 

Coras - solid and liquid. One differenti- 
ates, more or less, between numismatic 
coins and newly minted coins, or the 
so-called bullion investment coins. Nu- 


& •"”» C. Pd&drJa 


al recognition and cannot be counter- 
feited. They can be exchanged for cash 
on demand most anywhere in the world 
where gold is traded. This contrasts to 
gold bars, which have been known to be 
counterfeited, thus usually req ui re an 
assay to determine their purity. This is 
not only costly for the seller; but also 
takes time and requires formalities. The 
price ofthe leading coins canbefoundin 
the financial pages of most major news- 
papers. Or it canbe determined from the 
daily fixing of gold. Many countries im- 
pose a sales tax on gold coins, as wgll as 
bars. 


Bais-Eunffiar but Mt uaframRy recog- 
sized. The majority of bars sold today 
range from 1 gram up to 123 kilograms. 
The small bars are produced at a purity 
of .9999 fine gold. The trade accepts only 
bars from a reputable refinery which 
have a serial number. When there is 


pel* Certificates -Paper as good as 
-The advantage of this form of invest- 
ment in gold is that no tax is levied on the 
ownership of gold. The precious metal 
remains in the possession of a bank,' 
which usually maintains this in a no-tax 
area. The disadvantage is that there is 
usually a nrinimnm purchase amount, 
that variesfrom bank to bank- for exam- 
ple 10 Gold Maple Leafs or 500 gram bars 
-which makes this form unattractive for 
investors. Another factor is that 
one doesn’t have possession of the gold, 
which reduces some of the psycho- 
logical benefit of owning gold. 


1986 Non-Co m m te i ia t Gold Production 


/s - / » h|| 





Seurca:Coa3ofcMedGaUFMtJ3 


___ 4, 15. October. Recentreports 
ypil indicate that the coin from 
T PI|^staysdownundermsales 
competitors. After irri- 
in markets without 
r^^prs, the Australian 
:^^§ving down. Sales of 
recently 

g pp ^^^Mmckly eclipsed 
ij^i iWlWB 1 ?!*!'^^^eftlth partner, 
fonymous sources in gold trading 
circles attribute this to the stronger 
international position of the Canadian 
bullion coin, which ensures tradahility 
and liquidity. 

Gold production np. 

OTTAWA, 15. October. With a yearly 
production of over 100 tons (107 tons 
in 1986), Canada is third largest pro- 
ducer of gold in the non-communist 
world. 

The fust discovery was made in 1858 
at Cariboo, British Columbia. Today, 
forty-one mines produce the majority of 
this precious yellow metal. However, 
prospectors still roam the backwoods, 
searching for tin hidden lode and 
dream ed-of riches. 

The greatest amount of gold is mined 
in Ontario. Recent discoveries in the 
region around Hemlo made headlines 
around the world and boosted share 
prices. The main reason for the jump was 
the revised estimate of the gold reserve 
in this area: before the discovery 
reserves were felt to be around 130,000 
ounces - today they are known to be 
closer to 17 million fine ounces of pure 
Canadian gold. Enough to keep the 
Royal Canadian Mint busy striking Gold 
Maple coins to meet the needs of in- 
vestors around the world. 






18 


Financial Tiroes Tuesday November 3 1987 


UK NEWS - PARLIAMENT and POLITICS 


‘Wrecking’ 
threat to 


Minister hints at likely 


committee electricity price rise 


system 

By Michael Cassell, Political 

Comu pu ndant 

MR Derek Foster, Labour’s 
Chief Whip, yesterday threat- 
ened to wreck the House of 
Commons select committee sys- 
tem if the party was prevented 
from including members of the 
Campaign for Nuclear Disarma- 
ment on the all-party defence 
committee, 

The warning follows objec- 
tions from some Tory back- 
benchers about Labour plans to 
include two CND representa- 
tives on the committee, who 
they claim could represent a 
threat to national security. 

Government whips, however, 
are thought to be unconcerned 
about the proposals and are un- 
likely to object to them when, 
together with the composition 
of all other select committees, 
they are put by the Committee 
of Selection before the Com- 
mons for approval. 

Some Tory backbenchers, 
nevertheless, seem certain to 
state their opposition to the 
move, which could force a short 
debate on the issue but which 
would be unlikely to overturn 
the Committee of Selection’s re- 
commendations. 

Mr Foster said on BBC radio 
yesterday the idea that the Min- 
istry of Defence might restrict 
information to the defence com- 
mittee made a mockery of the 
principle of scrutinising what 
government departments were 
doing. 

He said he regarded the mat- 
ter as an issue of "the highest 
constitutional importance 1 and 
said Labour would press ahead 
with its plan for nominating two 
CND members. 

Ur Foster said that if a Com- 
mons vote rejected Labour’s 
nominations, the party "would 
have to find a way to stop the 
select committees from meet- 
ing.' 


BY TOM LYNCH 


MINISTERS yesterday ap- 
peared to accept that electricity 
prices were *“ ~~~ s ~ **““ 
near future. 

Hr Cecil Parkinson, the Ener- 
gy Secretary, told the Commons 
at Question Time that the elec- 
tricity supply industry had to 
show a higher rate of return on 
investment to finance Its C3bo 
capital investment programme - 
about £L3tm in 1887-88, more in 
1988-88 and an increasing trend 
in later years. 

Mr Parkinson rejected a sug- 
gestion by Mr John Prescott, the 
shadow Energy Secretary, that 
privatisation would itself push 
electricity prices up because 
economies of scale would be 
lost The industry was "entering 
a phase of massive investment 
and re-equipment” and the 
CEGB and future private inves- 
tors should get a reasonable 
rate of return on capital. 

"Whether the industry stays in 
the public or private sector, the 
rate of return in the industry 
has to be improved If the invest- 
ment programme is to be fund- 
ed.” 

He insisted that British indus- 
try needed security of supply, 
and this necessitated heavy in- 
vestment at a time when many 
older coal-fired and nuclear 
power stations were nearing the 
end of their usefulness. 


Mr Prescott said CEGB data 
showed that the cost of electric- 
to rise in the ity in countries such as Japan 
and the US where electricity 


supply was in. private hands, 
was double the figure in coun- 
tries such as the UK and France 
with state supply undertakings. 
He said a rise in electricity 
costs would be "the price the 
consumer Is going to pay for the 
privatisation of electricity.” 

Mr Peter Rost (C, Ere wash) 
said any new power stations or- 
dered in the roe-np to privatisa- 
tion should only go ahead if the 
investment could be justified 
on the basis of a commercial 
rate of return on capital, other- 
wise fiiture investors in new 
generating plant would be at a 
disadvantage. 

Mr Parkinson told him the in- 
dustry had to invest "on a real 
commercial basis, and that is 
what it will be doing.” Plans for 
the privatisation were "evolving 
nicely -they are on schedule.” 

The minister curtly told man- 
agement and unions in British 
Coal to "Stop wasting time on 
useless work-to-rules and over- 
time bans” and use the Govern- 
ment's £ 2 m-a-day inv es t ment to 
ensure its ftzture in supplying to 
the generating companies in the 
privatised electricity supply in- 
dustry. 


He said be was confident Brit- 
ish Coal had a secure future if it 
used its investment programme 
properly, and argued that the 
case often made on cost grounds 
for imported coal was over- 
stated - a move Ity the CEGB in- 
to world markets would put 
prices up, 

Mr Parkinson said the current 
overtime ban over British 
Coal's disciplinary code was 
"the most ridiculous aspect of 
British Coal’s industrial rela- 
tions.” It was a "wasteful dis- 
pute" which was damaging to 
the interest of miners and the 
Industry, and he defended the 
management’s conduct of the 
dispute. 

Mr Alex Eadie, from the La- 
bour front bench, said the BC 
board had been "found out to be 
deceiving the public over the 
question of the code of con- 
duct" and he contrasted state- 
ments by BC that the overtime 
ban was ineffective with its re- 
fusal to implement a pay rise 
while it continued. 

•Mr Parkinson joined in con- 
gratulating power workers who 
had restored power supplies to 
the south-east of England after 
the recent hurricane. He said 
they had rebuilt in two weeks a 
rural distribution network that 
had been 20 years in the mak- 
ing. 



Safety instead of sparkle 


Merger talks to focus on prospectus 


BY OUR POLITICAL COfmeSPONDeiT 


S DP-LIBERAL talks over the 
creation of a merged party re- 
sume today and are likely to be 
dominated by the crucial ques- 
tion of whether a joint policy 
prospectus should form part of 
any negotiated package. 

Since Mr David Steel, the Lib- 
eral leader, left for a visit to the 
United States, Liberal negotia- 
tors have expressed concern 
about a broad agreement he 


reached with Mr Robert Ma- 
clennan, the SDP leader, on the 
need to draw up a policy stance 
before any new party is 
launched. 

Last week Mr MfccZennan 
stressed that a joint policy pro- 
spectus was a necessary prereq- 
uisite for any negotiated deal 
and warned that If it was not 
agreed the merger talks would 


be considered a failure. 

The feeling within the Liberal 
leadership is that while there 
are some reservations among 
negotiators about the advisabil- 
ity of laying down policy in de- 
tail before the new party is 
launched, the issue must not be 
allowed to jeopardise the merg- 
er talks. The view is that the po- 
litical necessity for a prospec- 
tus is not in question ~ ' 




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Sir Philip Woadfleld: anger over 
kit appointment 

Opposition 
to MI6 
counsellor 

By John Hum 

SIR Philip Woodfleld, a former 
senior civil servant, has 'been 
appointed as a staff counsellor 
to the security and intelligence 
services in an attempt to pre- 
vent farther security scandals 
of the type that have embar- 
rassed the Government over re- 
cent years. 

The intention is that by listen- 
ing to the worries or doubts of 
members of these services Sir 
Philip would prevent cases like 
those of Mr Peter Wright, Mr Mi- 
chael Bettaney and Ms Cathy 
Massiter in which the inside 
workings of the security and In- 
telligence services have- been 
given widespread public expo- 
sure. 

But the announcement pro- 
voked an angry reaction from 
the Labour and Liberal parties 
who maintained that the pro- 
posal did not go far. enough to 
reassure public opinion. They 
argue that there should be a 
greater degree of .public ac- 
countability to parliament and 
were also annoyed that Mrs 
Thatcher made the announce- 
‘ ment by a written answer and 
not by an oral sta tem en t to the 
House on which she could be 
.questioned. 

Sir Philip, aged 84, was Per- 
manent Secretary at the North- 
ern Ireland Office from 1981 to 
1983 and was previously at the 
Home Office. He had dealings 
with the intelligence communi- 
ty in those jobs. Since 1084 he 
has been chairman of the Lon- 
don and Metropolitan Staff 
Commission, wmeh has been 
sorting out the staffing position 
following the aboliton of the 
Greater London Connell and 
the metropolitan county coun- 
cils. 

His appointment is purely in- 
ternal and no report will be 
made to the Commons about his 
activities. 

In a letter to the Prime Minin* 
ter last night Mr Neil Kinmwfcr 
the Labour leader, oaftwrf on 
her to make an oral statement. 
He said that the appointment 
was a step In the ritfnt direction 
but it did not go far enoug h. 


DURING the election campaign 
a familiar figure was seen walk- 
ing across College Green oppo- 
site the House ofLords, wearing 
a baggy pinstripe suit, bat, 
probahty alone of all Conserva- 
tive candidates, no blue pkrty 
rosette. Asked why, he joked 
that there was a l-m-20 chance 
of meeting one of his constitu- 
ents in the area. 

This anonymity was typical of 
the shyness and affability of the 
candidate' - Mr Peter Brooke, 
the new chairman of the Con- 
servative Party. 

He is very much an bidder's 
politician, respected by col- 
leagues. Bnt he -has never 
sought a high public profile, ei- 
ther as XP for the City of Lon- 
don and Westminster South 
since 1977 or as a minister. 

Mr Brooke is the quintessen- 
tial safe pair of bands, a decent; 
solid man who will keep Con- 
servative Central Office on the 
rails, and leave the main task-of 
being a public spokeamanfor 
the Government to members of 
the Cabinet 

He will also be seen as an in- 
terim appointment for the next 
two years, supervising the nec- 
essary reorganisation, until a 
more senior figure - possibly 
even Lord Young - becomes 
chairman in the run-up to the 
next general election. 

Mr Brooke is very much a 
team-player rather than a pri- 
ms donna. This was reflected in 
his business career when over 
18 years he built up from 
scratch the London office of the 
US management consultancy, 
Spencer Stuart. HO was one of 
the pioneers of headhunting in 
Britain and IS remembered as 
being painstaking and conscien- 
tious (incidentally being in- 
volved in recruiting the first 
chief executive of the Stock Ex- 
change and a director-general 
oftheCHD. 

Similarly, one minister re- 



Pefer Brooke; hern into politics 


rails than when they disagreed 
at a meeting Mr Brooke sent 
round a lengthy handwritten 
note the next day explaining the 

Treasury's position. 

He is also noted for his clever- 
ness and lifciog for quizzes, even 
passing notes with tests during 
the dull -phases of Commons 
committees. 

Peter Riddell on the 

new Conservative 
Party chairman 

' The key to Mr Brooke is that 
he was born into politics. His fa- 
ther was the Controversial-Con- 
servative Home Secretary of the 
early 1880s, Henry Brooke, 
while his mother was heavily in- 
volved in the voluntary side of 
the party. 

Now aged S3, he was educated 
at Marlborough and Balliol Col- 
lege, Oxford, where he fought 
Mr Paul Sarbanes, the US Sena- 
tor for Maryland, for the p reair 


Moore attacked over loss 
of benefit entitlement 


BY IVOR OWEN 

NEW restrictiodk on entitle- 
ment- to unemployment benefit 
proposed in the Social Security 
Bill could have the effect of re- 
moving up to 170,000 claimants 
from, the unemployment regis- 
ter, Mr Rebin Go ok. Labour's 
shadow Social Services Secre- 
tary, told the Commons last 
night 

He accused the Government 
of introducing provisions de- 
signed to coerce unemployed 
teenagers under the age or 18 
into entering the Youth Train- 
ing Scheme and of effectively 
depriving men and women aged 
between 58 and 60, who belong 
to occupational pension 
schemes^ of the right to unem- 
ployment benefit if they be- 
come redundant. 

Mr Cook's catalogue of criti- 
cism brought a hint. of at least 
one concession from M* Jfahn 
Moore, the Social Services Se- 
qertazy. 

The .minister made it dear 


that a provision restoring the 
law on entitlement to atten- 
dance allowance to what the 
Government thought it to he be- 
fore a Judgment by the Court of 
Appeal would, not be allowed to 
inhibit payments in cases al- 
ready Ta the pipeline". 

Mr Cook gave notice that the 
Opposition would contest most 
of the Mil’s provisions and con- 
trasted the Government's deter- 
mination to curtail social secu- 
rity expenditure with the 
expectation of more hints of to- 
co me tax cuts when Mr Nigel 
Lawson, the Chancellor of the 
Exchequer, makes his annual 
public expenditure statement 

today. — ■* — - 

. Mr Moore reminded the crit- 
ics of the bin that the Govern- 
ment's proposals for denying 
unemployment benefit to those 
aged under 18 whip refused a 
piece In' the Youth Training 
Scheme were mcluded to the 
Conser vative Party' manifesto 


deucy of the Junior Common 
Room. Be was president of the 
Oxford Union, and, unusually 
for a Tory, was active in the Na- 
tional Union Students, before 
being a Harkness Fellow at 
Harvard Business School. 

T ike his predecessor, Mr Non 
man Tebbit, Mr Brooke has FI- 
nancial Times connections, hay. 
tog worked as a correspondent 
in Switzerland from I860 to 

* Alongside his business ca- 
reer, Mr Brooke was active in 
local government, on Camden 
i ^wnpfl, and on the governing 
body of various schools. 

After fighting Mr Neil 
Ktonock in Bedwellty to the Oc- 
tober 1974 election, he became 
an. MF in Febraury 1977 when 
Mr Christopher Tugeadhat re- 
signed to become an EG com- 
missioner. 

He then rose steadily up the 
insider’s route, as a whip from 
1979 to 1883, then as underse- 
cretary responsible for higher 
education. Just under two years 
ago he was promoted to become 
a minister of state at the Trea- 
sury, where he impressed Mrs 
Thatcher and fellow ministers 
for his handling of the thorny 
and complicated question of EC 
finances and Britain's contribu- 
tions, particularly when he 
chaired the Budget Council in 
the second half of 1888. 

His thoroughness and exper- 
tise were recognised this June 
when he was given the title or 
Paymaster General within the 
Treasury. This followed specu- 
lation that he might become 
Chief Whip. 

Throughout his political ca- 
reer Mr Brooke has had a repu- 
tation for diligence rather than 
sparkle. He will now have to 
snow whether there is political 
steel beneath the affability. 
That is what will he needed if 
Conservative Central Office is 
to be reorganised. 

FT bids likely 
to be referred 

MR FRANCIS MAUDE, the Cor- 
porate and Consumer Affairs 
Minister, has indicated that any 
takeover bid for the Financial 
Times would be referred to the 
Monopolies and Mergers Com- 
mission. 

Mr Maude was responding to 
a letter to Mr Malcolm Bruce, 
the Liberal trade and industry 
spokesman, who had expressed 
concern about the 14.7 per cent 
of Pearson, the FTs parent 
company, held by Mr Rupert 
Murdoch’s News Corporation. . 

The minister said takeover 
legislation was "dear on the 
question of the Financial 
Times." The Trade and Industry 
Sec ret ary was required to refer 
to the MMC any bid for a news- 
paper with -a -paid-for circula- 
tion of more than 25,000 unless 
there was evidence that it was 
not a going concern or the case 
was urgent. 

. However; he said, the Trade 
and Industry Secretary could 
net prejudge what decision he 
would eventually make. 



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IN SPUE OF Labour’s determi- 
nation to beef up its lacklustre 
House of Commons perfor- 
mance as Her Majesty’s princi- 
pal opposition, much of tile -par- 
ty's energies will, over the next 
few months, inevitably be tinn- 
ed towards in the search for a 
fresh formula for "electable so- 
cialism”. 

In just over two weeks, a joint 
session of the party's national 
executive committee and shad- 
ow Cabinet will put the finish- 
tog touches to a review of strata- 

r and policy which is 
lttoiataty designed to end what 

will be more than a decade of 

political impotence on the op-' 
position b enches. 

The search for an elector-ally 
attractive political slate, an- 

nounced by Mr Neil Kinnock. 
the Labour leader, at the party’s 
annual conference in Brighton 
a month ago, has been greeted 
with enthusiasm, suspicion and 

outright hostility by various ele- 

ments within the party. 

Though Mr Kinnock: is ada- 
mant that nothing short of- an 
all-embracing rethink of party 
policy is acceptable, neither 
can he. or his colleagues be in- 

any doubt about the outlook fof* 

more internal fighting of the 

kind which has to the past - so - 

badly d amag e d Labour's stand- 
ing with the electorate. 

No one within the leadership' 
is under any illusions 'that there 
will be complete unanimity at 

the end of the policy revi ew pro- 

cess. Labour’s purist left has al- 
ready heard enough to know 
that it will not like the outcome 
of an exercise which it feels, in 

acknowledging the impact of 


T hatcherism, is Intent upon be- 
fraying socialism. ' 

The feelings of the .hard left 
quickly and predictably sur- 
faced at last weekfs NEC meet- 
ing, wife attacks on the' ■revi- 
sionists' fay Mr Dennis Skinner, 
the HP for Bobover, and Mr 
Tony Bean* the MP for Chester- 
field-Mr Skinner was alone to 
voting againstrthexeview.by vot- 
ing down fends for the exercise 
whfie Mr Benn repeated his. 
apocalyptic forecast of immi- 
nent, international chaos and 
claimed that the review was, as 

a result, totally irrelevant 


ness, will provide the momen- 
tum to conclude the patofol re- 
examination successfully. . 

The list, of joint conveners for 
the review groups clearly un- 
. derlines the Kinnock grip .on 
the party and the poficyretiiink. 
. For example, Mr Bryan Gould, 
the party’s trade and industry 
spokesman, who has. horrified 
the left-wing with his references 
to wider share ownership, will 
jointly .' Chair the group investi- 
gating economic policy while 
Mr Gerald Kauftnan, the shad- 

ow Foreign Secretary from the 
party's centre-right, will t ake 


Michael Cassell traces Labour's efforts to 

find a way out of the opposition wilderness - 


ft aeons most likely; there- 
fore, that white they will step up 
their public calls for undiluted 
socialism, they will decline to 

take part in a review which 

would soil their radicalism and 
which they know will find 
against their own philosphical 
blueprint for success. Other 
.lfefrwtog NEC members, like Ms 

Jo' Richardson and a new re- 

"criiit, Mr Ken Livingstone, are 
unlikely to prove as. openly hos- 

tile to the proceedings and- EEs- 
Richardson has already accept- 
ed-* key post on one of the sew- 
ed policy review groups to be 
established. . 

■But if there id to be di s s e nts 
Mr Ktonock is confident that 

three election defeats, together 

with the threat that another 

could permanently consign the 

party to the political wilder- 


' the same rale on the group ex- 
amining Labour’s defence strat- 
egy. 

Another of the . key w 

groups, which will be exi 

to report back to the NEC 

pw Cabinet by next April, will 
be on the economy, with Mr 
John Smith, the shadow Chan- 
cellor, heading it as a joint con- 
vener. Last week, the NEC 
passed an emergency resolution 
noting the "failure of capital- 
ism” and endorsing a Ken Liv- 
ingstone amendment which 
called for a major extension of 
democratic -control, planning 
-and regulation over the finan- 
cial sector. 

.Mr Kinnock’s own ideas on 
the subject might not go as far 
as the former GLC leader’s but 
he later confirmed his belief 
that self-regulation in the City 


had failed and would have to be 
replaced by a more formal sys- 
tem. He also, stressed that new 
controls - involving the Bank of 
' England and an unapologetical- 
ly interventionist government • 
would be a prio ri t y in the drive 
- to ensure that the financial ays* 
tem met the needs of British in- 
dustry. 

But however much the review 
process is struct ure d to pro- 
duce results acceptable to the 
Ktonock leadership,' Labour is 

going out of its way to stress the 

validity of the exercise, point- 
ing to what it claims will be an 
unprecedented degree -of inter- 

nal and external consultation. 
As one senior party official said 

last night: "This is not going to 
be a case of the leadershiprim- 
pty puffing rabbits out of the 
hat The way to legitimise the 

review and its outcome is to en- 

sure that all points of view are 
canvassed and considered.” 

Next month, the party will 
start its "Labour Listens” cam- 
paign, which is designed to com- 
plement the policy review by 
seeking out the views of the 
electorate. Meetings will be 
held around the country and 
targeted towards specific 
groups like the -low paid and 
pensioners. 

Throughout next summer, the 
preliminary fiwriitig c of the two 

exercises will be welded togeth- 

er and presented to the form of 
an outline statement to the par- 
ty's annual conference De- 
tailed policy work will then oc- 
cupy the next 12 months, so that 
Labour’s new electoral plat- 
form can be revealed in 1989. 


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Issue Price IQVA per cent. 


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OCTOBER 1987 


“«W j 


Leadership. 




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After the 
Big Bang - 
the Tidal 




Now that the worst of the Bg Bang is 
am off serious penskmspecbBsashouU 

be looking out for the tidal wave of new 
legislation. tax regulations, loopholes and 
new products an offer. 


Never b^xe ha the pemknsbusbim 
been in such a state of turmoiL That's why 
serious pensions prqfissdonah need emy 
help tokeepdbrtast of new developments. 


Wfwever your sphere of pensions Mer- 
est. you should be reacBng Pensions 
Management - the monthly magazine 
fmm the Financial Times. 


If it's your job to advise individuals or 
companies on their pension needs then we 
provide you with the information on 
Y/hkhproductsmgofor-vdiaithe perfor- 
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coneBtions are, the background aid the 
drawbacks. 


If you are a person trustee you wtt 
already know about the wealth of invest- 
ment management companies around - 
and abort the vast nmgeqffunds on offer. 
But which fund management company 
wartd be best for your scheme? Do you 
wart only one management company -or 
do you ready need two? Whet about In- 
dexed fundi risk m ana ge m e nt or even 
qurmtiative techniques? The answers will 
bemuch easier to find if you mod ton ki ns 


jf you areafimd manager you wBabo 
find Pensions Managanentm bean tafit- 
pensable working tool Wcawryartidaon 
penson fund investment inducSngregukw 
reviews cf different sectors end the new 
"vehicles’. 


But don't take our wood far itVy Par 
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you w&fbtf much qfbtterest every month 
it Pensions M a n a geme n t Seefbryansef 
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you cm keep your head above w ate rwhe n 
the tidal wave flnaByh&s. 


Financial Times Tuesday November 31987 


CONTRACTS 


Industrial building 
orders for Tarmac 


Pro tect* worth narettanfltm 
have been cw&rtled to TARMAC 
CONSTRUCTION. 


Three of the largest are for 
factory bonding* at Trow* 
bridge, Wiltshire, for Nestle* 

QCfca); warehouse extensi on s at 
Nuneaton, Warwickshire, for 
Foster Brothers (£2m£ and a 
two-storey catering complex at 
Pease Pottage, West Sussex, for 
Zrastfamue Forte (£L2m). 

In the north-west the compa- 
ny has contracts for extension* 
to shopping units at Ponlton-ie- 
Fjride, Lancashire, tor CRad- 
stong M anagement Services 
(£525,000), and two contracts 
from Mersey Regional Health 
Authority for designing and 
building ambulance at 


Bootle ( $402400 ) and Fazaker- 
ley (£474,000), 

Two protects have been 
awarded to Tarmac Construc- 
tion Reftab. They are for refur- 
bishing a hangar for Birmingh- 
am International Airport 
(#196,000), and alterations and 
extensions to the Kings Head 
public house, WeHesbooroe, 
Warwickshire, for Bass Mitch- 
ells and Butlers (£415,000). 

A number of contracts have 
also been awarded to the com- 
pany’s contract' housing divi- 
sion, which specialises in build- 
ing, repairing and modernising 
public sector r ousing. 

They include work on homes 
at Sheffield (£L8mX Wal- 
wllttHsft Bedford (£Llm) and 
Leeds (£593,000). 


More work at Stansted 


ALFRED McALFINE has won 
ten contracts worth a total of 
more than Cum. : 

Alfred McAlpine Construc- 
tion has been awarded a 
-£5.4meontnct by Stansted Air- 
port, Essex The contract, which 
has started includes excavation, 
work, building reinforced con- 


crete retaining walls, and a cut 
and cover tonneL The project 


will last 14 months. 

The company has won a con- 
tract for Regency Place Part- 
nership valued at £4m to build 
41 luxury Oats and associated 
facilities at Regents Park Road, 
Lonriop t N3. The 16 month con- 
tract will also involve associ- 
ated external works. 

- Winchester City Council has 
awarded Alfred McAlpine a 


APPOINTMENTS 


Chairman of Metal 
Closures Group 


Mr Peter Smith, «4 i»h <w of 
METAL CLOSURES GROUP, 
has resigned due to family com- 
mitments. He is succeeded by 
Mr BA. Graves, a director, who 
becomes nonexecutive direc- 
tor. Mr Graves was chairman 
and chief ex ecu tiv e of Brick- 
house Dudley, arid' la a director 


of Secnricor Group, Security 
Services, and a local director of 
Barclays Bank. Mr H-Legg. who 
recently retired as a director of 
the John Lewis Partnership, be- 
comes a non-executive director. 


ABB E Y L IFE INVESTMENT 
SERVICES has' appointed Mr 
Edward Whittingdaie as direc- 
tor for European equities. He 
Joins from The Colonial Mutual 
life Assurance Society where 
he was assistant investment 
manager. 


Mr Jehu Junta, a Ladbzoke di- 
rector and executive chairman 
of its- holds division, has been 
appointed rfMfanmn chief 
executive of HILTON' INTER- 
NATIONAL, recently acquired 
by the L&dbroke Group. Mr Mi- 
chael Hirst, a Ladbroka director 
and managing director of its ho- 
tels division, also becomes an 
execut i v e director of Hilton In- 


Mr Pavia M. Mows!, chief execu- 
tive of the Edinburgh Chamber 
of Commerce,-has been electe d 
president of the BRITISH 
friTAwmcttB OF COMMERCE 
EXECUTIVES for 1967/88. . 


contract worth ffidm, to re- 
build a leisure centre which 

was badly damaged in afire in 

the heart of the city in Hamp- 
shire. 

The re-built centre will fea- 
ture a sew flume - or tabular 
watersiide. The ***“" 

lar steelwork for Jf 

featured both internally and ex- 
ternally with extensive use of 
Blazed wall cladding. The con- 
tract also include* a new bar 


/ The pool halls will be com- 
pleted to spring 1S88, with com- 
pletion following hr the sum- 
mer. 

The company has been award- 
ed a £960,000 contract by the 
Department of Transport fbraa- 
vance works, associated with 
the M 62, in preparation for the 
east bound climbing lane be- 
tween Junctions 21 and 22 at 
MUnrow, near Rochdale, L a nca- 
shir e. This will in clud e con- 
struction of five crossovers 
across the central reserve, sev* 

traFreaerre and fencing, drain- 
age and lighting works. 

The Department of Transport 

|isb also awarded the company a 
contract • at Chingford, 
North-East Londo* 1 , to demolish 
13, two-storey terraced houses. 
Work on the remaining terrace 
will include treatment of ex- 
posed elevations, roof and foun- 
dations. The contract is worth 
over £54000. „ , 

Alfred McAlpine Minerals 
has been awarded a £L7m con- 


ing directors. Mr 
and Mr fUmam Ben- 


tfcy Join the board. Mr Richard 
wmdnsen has been appointed 
.finance di rector. He was man- 
atfing director of Sears Ftaan- 


i— ■>, president and chief oper- 
ating officer of Hilton 
International* wiU continue in 
thiarole. 


Mr Lewis Clifton. a tiiird gener- 
ation islander. Is the new 
FALKLAND ISLANDS GOV- 
ERNMENT representative in 
London. He has succeeded Mr 
AlastairCamanML . 

* 

Mr Babin Catbcart has been ap- 
pointed director of 

TRANSPORTATION PLAN- 
NING- ASSOCIATES, « High- 
Point Bendel company. He suc- 
ceeds Mr Terence Muiny who, 
following his promotion to the 
board of Rondels, will remain 
deputy chairman ofTPA. 


PACBB L EISU RE GROUP has 
appointed Mr Bernard Gxrbttcx 
as chairman and chief execu-* 
tive. Sir Whsics Baywm becomes 
a non- ex e cuti ve director- .Mr 
Alan Thornton and Mr Stephen 


Following the 
CLYDESDALE 


se.of the 
last Fri- 


t»ct by the Depart ment of 
Transport tor resunadug end 
repair work oa the M58 motor, 
way, near M anchester Airport 
between junctions 3 and fcTke 
company has also been ward- 
ed me sub-contract for sarbo- 
ing works on the A483 Cfrtefonl 
to Polford by-pas*» near: Wrex- 
ham, which is currently being 
built toy Alfred McAlptna Con- 
struction in a £Z&7hi overall 
contractThe surfacing work, 
which is valued at £800000 is 
doe for completion by the cad 
of 1988- 

Norwest Holst has awarded 
the company the sub-contract 
for surfacing works era the new 
Deestde Road Link, near 
Queensfenry, North Wafas. The 
contract is valued at £8 QQJOOQl 

Alfred McAlpine Services A 
Pipelines fan been awarded a 
contract by Shell U.K- forwmfc 
at the Stanlow Oil Refinety, El- 
lesmere Port The contract, val- 
ued at CJXKM0Q, i nv o lv e s lilting 
and providing sew support* to 
400 metres of crude oil pipeline. 
The contract will be completed 
by the end of the month. 

The company has won a coo- 
tract from Merseyside - ami 
North Wales Electricity Board, 
for work across lie River Dee at 
Hand bridge, Ghester.Tba proj- 
ect comprises inst a ll at i o n of 
tive 200mm diameter cable 
ducts. The ducts wfll be used to 
carry 33 , 000 -volt cables to rein- 
force the electricity supply to 
the new Chester Business Park 
The contract uvalued at 
£28j00k 


Australia Bank, the Australian 
bank’s managing director Mr 
Nobby Clark has been appoint- 
ed a director of Clydesdale. Mr 
Bair* Hefresu chief general 
manager corporate and i 
tionai banking, also Join/ 
Clydesdale’s board, with Mr 
William H. Hodgson, deputy 


note director. Sir Erie Yarrow, 
Clydesdale Bank's chairman, 
has Joined the board of Nation- 
al Australia Bank. 


uss zounuaoo 

C OF ITALY CUM 1 


AGED ASSETS LTD 
F-EJLAJLk 

FLOATING EUBO-DOLLAR REPACK- 
AGED ASSETS OF THE REPUBLIC OF 
ITALY DUE 1993 


JOHN BROWN AUTOMATION, 
Coventry, has appointed Mr 
Clive Nic kel— as finance di- 
rector. He was financial con- 
troller. 


For fet period October 3ft 1987b Sum- 
ary 29,. 1988 fee nates wiH enjr an 


Merest rate of 78% per mm wife m 
Moot onauntor US* 1,96^73 per USS 
100,000 note. 

Hie relevant Merest pwmot fett vH be 
January 29, I960. 

BANQUE PARIBAS (LUXEMBOURG) 
• SJL 
Asm Bank 



• 


— 

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1 1 Hlr Mum PM 

da have been ap ; ainted day (uctooer aw oy JNauonxi j 


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financial 1 iffics Tuesday No\ember3 1W 

TECHNOLOGY 


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THEY WERE the flagships of 
the EC* research effort in the 
heady days of the eariy 1960s - 
and now the European Commis- 
sion is .desperately trying to 
keep them afloat 
The fbttr Commiiiiity-tUxided 
science laboratories at Ispra in 
northern Italy, Karlsruhe in 
West Germany, Petten in the 
Netherlands, and Geel in Bel- . 

S am, were to lead Europe into 
condemn 
ry. Yet the 
.true* 

Ispra, fay far the largest and 
most highly criticised of the 
so-called Joint Research Cen- 
. tres (JRCs), now stands discred- 
ited - fay the Commission’s own 
a dmis s i on - as a directionless 
and unhappy, establishment, out 
of -touch with commercial reali- 
ty and poor value for its 
EcnlSOm annual budget. Its rep- 
utation provided much of the Ki- 
el for the Commission’s critics 
in the long battle for agreement 
■ on its entire Ecu&2bn research 
budget - of which the JRC is due 
to take roughly 10 per cent - for 
the next four years. In the pro- 
cess, the Commission was 
forced to cut its original overall 
research funding plans by al- 
most halt 

Now the Brussels authorities 
are planning what will be the 
biggest shake-up in the centre's 
history, ita the shape of a four* 
year plan to be put to Research 
-Ministers at the end of this 
month. The JRC’s surviv al could 
be at stake. 

"There is still a certain ten- 
dency to assume that just be- 
cause the JHC is there, it will 
continue. That is not necessari- 
ly so*' says one of the centre’s 
~ chief critics. 

Jacques Delon, the Commis- 
sion President, feels he should 
be seen to be taking a critical 
look at a weak area in research 
spending at a time when the en- 
tire EC budget is going through 
one of its perennial crises* The 
Commission’s re fo r m document 
.is also seen as an attempt to 
"take the initiative against the 
JRCs’ harsher critics, shch as 
- West Germany, France and 
Britain, and to head off UK sug- 
gestions that the EC should 
wash its hands of the problem 
and privatise the JRC. 

Brussels suggests that the 
centres' should reduce their 
near total dependence on the 
EC research budget to turodnd 
60 per cent by isoo. ruling be- 
low SO per cent In 10 yean" time. 
The balance should cotne from 
contracts from the Commission, 
g ov er nm ent laboratories hna 
private companies. 

The commission propose* “a 
sweeping reform or the JRC’s 
objectives,' its mods of opera- 
tion, and its meihbd of manage- 
ment" 

Ispra in partibulhr needs "a 
clean break with the practices 
of the past,” says the inform doc- 
ument In the meantime, Brus- 
sels. is asking - for Ecu690m to 
keep the JRC’s existing activi- 
ties going from the start of next 



Rude awakening for 
the dream factories 

WfUiain Dawkins reports on the EC’s battle to keep its joint Research Centres afloat 


year until lflOL While the faud» 
get for the EC’s overall research 
framework programme has 
been agreed, the JRCs share 
within it has still to be decided 
fay a qualified majority vote of 

National officials from the 12 
member states are to visit 
northern Italy this week to dis- 
cuss the scheme. But the tint 
real test of Whether the Brus- 
sels authorities’ ideas are tough 
enough to satisfy tee sceptics 
will start on November so when 
Community Research HhUsten 
meet to discuss ted JUGS’ ft*, 
tdrfe* 

So What went BO badly wrong 
with the ComffltifiUy’s technolo- 
gy showpiece eiui why?. The 
JRCs Ore a ted example Of how 
scientific projects can all too 
easily Be ufatet fa? fttlfflcal fast 
terifere&bei They have Suffered 
from a deadening ttUkture of na- 
tional wfahgliflg WeT the scien- 
tific content of their research. 


work, indecision, and a suffo- 
cating hydra-headed manage- 
ment committee structure. 

Ispra was established Under 
the 1907 Euratom Treaty, the 
main aim of which was to sup- 
port and comrdinate member 
states’ nuclear e ne r gy pro- 
grammes. Like many large nu- 
clear establishments round the 
world, such as Harwell in the 
UK or Livermore in California, 
the JRC has had to face up to 
the need to adjust to a declining 
requirement for basic nuclear 
research. 

It did accordingly widen its 
work over the years to include 
areas like atatepeliotion re* 
search, alternative energy and 
materials testing, not to men- 
tion a ragbag or more esoteric 
projects such te satellite moni- 
toring of "the npwelling sea cur- 
rents of the coast of north west 
Africa" or "Wine monitoring' for 
the Commission’s agriculture 
directorate. 


Even so, the JRC has foiled to 
make much contribution to ar- 
eas of real importance, accord- 
ing to a panel of industrialists 
pulled in by the Commission to 
make an independent assess- 
meni. Their ideas form the ba- 
sis of the reforms now on the ta- 
ble 

Among the JRC’s top achieve- 
ments are being tee fust to spot 
tee radioactive Cloud moving 
across Europe from the Cherno- 
byl disaster, .the creation of a 
data bank of environmentally 
dangerous chemicals and tee 
use of satellites Co predict 
floods - usefol stuff hdt nothing 
of top international signifi- 
cance. Moreover, tee JRCs* 
standards are "idaeqh&te by in- 
dustrial Standards," maintain* 
teepsheL 

The commission’s numwg 
point' is to scrap tee present 
cumbersome Scientific Council 
teat oversees tee JRC&andsglit 


the four centres into n<™» au- 
tonomous and specialised insti- 
tutes, giving the scientists on 
the ground m«iwiinn decision 
making power. The units will 
cover nuclear measurements, 
nuclear fa els, reactor safety, 
advanced materials, environ- 
mental protection, satellite 
sensing techniques, systems en- 
gineering* information technol- 
ogy and "prospective studies' in- 
to new research possibilities. 
MOSt of this is Just giving tee 
JRC’s axittiftt activities a more 
organised shape, though tee 
suggestion for speculative work 
Is new. 

What will be very different, 
however, is the JRC’s fanctton. 
It will continue to carry out EC 
inspired and funded research 
programmes, an activity which 
accounts for nearly 90 per cent 
of present activities. But the 
■centre’s new emphasis on more 
technical work for other Com- 
mission departments and con- 


tract research for third parties 
will be a departure into a more 
commercial world where the es- 
tablishments will be dealing 
with customers rather than 
faceless institutions. 

The target is to scale down 
programme activities to around 
half of the total within 10 years, 
with contract research to ac- 
count for between 35 per cent 
and 50 per cent and exploratory 
research to absorb up to 10 per 
cent The general theme, ex- 

S ilalns the document, is "to al- 
ow far more contact between 
the JRC and the outside world." 

An important part of that will 
be injecting new blood into a 
staff whose average age Is 50 
and some of whom earn more 
than twice as much as their 
counterparts in nationally tend- 
ed laboratories. According to 
the industrialists’ panel: "Stan- 
dards are lower than desirable 
partly because of the contin- 
uing debate over the future of 
the JRC, which discourages 
good people, and in a larger 
measure because tenure of em- 
ployment in the JRC is in many 
cases ’guaranteed’ for life, tee 
salaries are very high and pres- 
sures to*..produce results do not 
include the ultimate sanction of 
job loss." 

The Commission wants to 
keep the present overall staff 
size of 2£80. But it suggests ear- 
ly retirement for those "whose 
qualifications do not match the 
new scientific objectives,' 
shorter contracts for the rest, 
retraining, and a new system of 
three-year temporary second- 
ments of top scientists from the 
private sector. 

Whether all this will be 
enough to satisfy the JRC’s crit- 
ics is uncertain. The signs are 
that the idea Of tying the JRC to 
getting a predetermined share 
of its income from outside 
sources will get wide support, 
but that some member states 
will want more detail on who 
the customers will be and the 
JRCs real chances of being in- 
dustrially competitive. Another 
possible bone of contention is 
whether the JRCs scientific ob- 
jectives are appropriate. Some 
observers tear they could dupli- 
cate other EC-tended research 
activities, such as information 
techology, which is already cov- 
ered by the separate Esprit pro- 
gramme for collaborative re- 
search between member states. 

Perhaps the biggest uncer- 
tainty of all is whether the JRC 
itself is flexible enough to cope 
with the proposed changes. "If 
tee answer is no," says the In- 
dustrialists’ pa -eL "then we rec- 
ommend that the JRC shonld be 
reduced by no new hiring and 
by early retirement until clo- 
sure takes place.' 

Their guess is that the answer 
is only "partly positive,” bat that 
the JRC Is worth reforming. No- 
body seriously think* that the 
centres will be axed, but there 
is certainly some tough talking 
ahead about the terms of their 
survivaL 


AT&T data takes 
quick bus route 

AT&T BELL Laboratories In 
tee US has developed an opti- 
cal fibre network for both met- 
ropolitan and suburban areas 
which. It is claimed, meets ma- 
jor requirements for tomor- 
row's inter-office transmuston 
if information. 

Known as Metnbus, the sys- 
tem is able to deal with both 
synchronous and asynchro- 
noes traffic, taking In and ad- 
justing a wide variety of data 
transmission rates to the speed 
of optical network. 

At each point on the net- 
work, traffic is added and 
dropped, lower-speed signals 
being combined with faster 
ones to give efficient use of the 
optical fibre’s capacity of 878m 
bits per second (the equivalent 
of 13,009 voice channels). 

The laboratories claim that 
becanse Metrobus accepts a 
wide range ef existing trans- 
mission rates, has high call 
carrying capacity and allows 
easy adding, dropping and re- 
arranging of traffic at each ex- 
change point on the network, 
the coat per transmitted bit la 
lower than today’s convention- 
al cable and non-eynchronoos 
optical systems. 


Bloodless coup In 
the dental surgery 

OPEN WIDE, this wont hurt a 
ML 

Satelec of France has devel- 
oped a dental surgery User 
which, no bigger than a con- 
ductor’s baton, can heal decay- 
ing tooth tissue immediately 
and help to trigger the devel- 
opment of dentine (the sub- 
stance of which teeth are 

wiilwty MiBBiri) 

Called Lasersat, this "tangle 
wand* can also be used for ster- 
ile and bloodless surface sur- 
gery. But where it scores over 
»hnil»T devices already In use 
la In Its sfate and weight 

Conventional carbon dioxide 
lasers weigh around lOtkgs 
while the entire Lasersat unit 
totals less than Up and the 
handset Itself weighs only 
5— gra ms. The main unit, 
which Is the she ef a large 
hook, runs off mains electrici- 
ty and has a gas supply which, 
tee company says, should last 
about three years and can be 
easily replenished. 

The unit generates energy at 
radio wavelengths, and thu is 
piped along a waveguide to the 
carbon dioxide laser In the 
handset, which Is 30cm long 
and 2JMata in diameter. 

Thus the Lasersat does Sway 
With the need for equipment 
such as the directional mirrors 
which are n e ed ed when, as in 
conventional devices, tee laser 
beam is generated fa tee main 
■hit attd pumped tea handset 


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Low-cost line to 

factory automation 

IN THE UK, 666 Fanuc Robot- 
ics iff Colchester Is offering a 
£40,600, eight metre long facto- 
ry automation system which 
can carry out a variety of on- 
manned welding operations. 

Hie system, developed in 
conjunction with Westwood 
Automation of Pfympton, De- 
von, can handle tabs on a flexi- 
ble basis. Coded pallets carry- 
ing the workpieces are read fay 



Edited by Geoffrey Charlish 


the robot, which then carries 
out tee appropriate welding 
tasks according to the pro- 
grammed ins tractions In Its 
memory . 

A two-tiered conveyor sys- 
tem has a lilt at one end and a 
dropping table at the other so 
that pallets move In one direc- 
tion along the top conveyor and 
in tee opposite direction along 
tee bottom. When a pallet rises 
and Is presented at tee robot 
workstation, pins rise up to lo- 
cate It accurately so teat the 
Arc-Slate robot can start work. 

Simplicity and rellabllllty 
are the keynotes ef the system. 
Several hours of random, 
mixed batch Work can be load- 
ed at a time and the robot left 
to get on with H In complet e 
confidence." 

Both waiting time and work 
In progress c*n be eliminated. 
With a system at this price, the 
company hopes to bring tee 
benefits of automation to a 
much wider spectrum of In- 
dustry. 


CONTACTS: AT&T Bell: US, 
(201) 564 4242. Satelec: France, 
5634 0607. 600 Fanuc Robotics: 
UK 0206 868848. 


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Whatever your requirements Agfd Will deStgh a 
system to suityour particular needs ■* including stun etui, 
processors, readers, priMett and doinpiitirdidid rtftitVaL 


We hnife technological experts on hand to design 
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While you cm rely on Agfa's prompt and effective 
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Just like the system itself 
Phone Jo Morgan for die full faces and she'll 
help you Shake thihgs up. And retrieve some very useful 
information for you* 


MICROFILM SYSTEMS* Telephone: 01-560 2131 

Agfa-Grraert ltd, 27 Gnat Wesi Road, Brentford Middlesex TW8 9 AX. 

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When high-tech companies like Burr-Brown, Unisys, NEC, Johnson. & Johnson, 
ftxrdnti and ApaUo Computer migrated to livingston in Scotland, they had powerful 


Not least of which was the power supply itsd£ 

Manufacturers i nv ol v ed in and other high-tech industries can rely on an 

almost unlimited stable power Supply-something thafe not always the case in the rest 
afEurope. 

Companies based in Livingston can also rely on a highly skilled local workforce thats 


They rstn move st r^gfo mt» a purpose-built high-technology park called Kirkton 
P&fttjpiijg, alongside wwns of jW most prestigious names o p er a t ing in the advanced elec- 
tronics field today. 

They also etajoy financial inrpntiws m the 


\bu won't find ai&actbns like these just anywhere 
in the UK. 

But then, Iivzngptanfe not just anywhere. I& a very 
special place to five and work-with excellent road and rail 
Hnks -throughout Scotland and to (he rest of the UK. 

And with twO tnfcwn a tirmal aitports just along the 
motor way you can fly here from just about every major 


rilMMIMIItete 

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West Lothian EH54 6QA, Scotland. 

Tel: 0506 414177. 

Prove that Livingston is the most logical 
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~1 


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Name 

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rosnnxi 

Compaiy 

Address 


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Postcode. 

■telephone. 


I 


FIX 


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I MAKE IT IN 
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| Europesmost logical location. ) 






22 


Financial Tunes Tuesday November 3 1982 


MANAGEMENT : Small Business 


VENTURE CAPITAL has al- 
ways been the Rolls-Royce end 
of the small business sector in 
the UK. From their smart of- 
fices m the City or the West End 
the venture capitalists set out to 
cultivate the brightest and the 

best of the small firms. 

Having started as a handful of 
venture capital funds in the 
mid-1970s, the industry has tak- 
en off in spectacular fashion 
daring the 1980s and currently 
numbers nearly 130 venture 
teams. The increasing populari- 
ty of the sector can be gauged 
from the fact that venture capi- 
talists raised from Insti- 

tutions and private investors in 
the first nine months of 1987 - 
more than the combined total 
for the whole of 1985 and 1988. 

Yet with success has come a 
growing sense - both inside and 
outside the industry - that large 
amounts of venture capital 
ftinds are not going where they 
are most needed: to provide eq- 
uity backing for the young, Inno- 
vative companies which will be 
needed to create wealth and 
jobs in the 1990s. 

The frill impact of last 
month’s stock market crash has 
yet to be assessed but until mar- 
kets dived venture capitalists 
were putting increasing 
amounts of money into relative- 
ly safe management buy-outs. 
This left less and less available 
to finance companies involved 
in new technologies or new pro- 
cesses in their early stages of 
development. 

The completion, in early Octo- 
ber, of the £7 15m buy-out of the 
UFI furniture group from Asda, 
the food retailer, set a record. 
Overall, British venture capital 
fUnds put 44 per cent of their 
money into buy-outs last year 
while just 23 per cent went into 
start-ups and early stage invest- 
ments. 

True, the earlier stage financ- 
ing was the single most impor- 
tant category in terms of the 
numbers of deals done but it ac- 
counted for just 32 per cent of 
the number of deals last year, 
down from 42 per cent in 1983, 
according to UK Venture Capi- 
tal Journal figures. 

In Europe as a whole venture 
capital companies Invested a 
similar proportion of their 
fUnds - just under a quarter - in 
buy-outs and In early stage fin- 
ancing last year. But the past 
two years have shown a shift to 
buy-out financing, according to 
figures released last week by 
the European Venture Capital 
Association. If the British and 
US venture foam* can overcome 
the resistance of Continental 
managers to the buy-out idea 
this type of deal can be expec- 
ted to increase. 

*1 have no defence against the 
people who say that venture 
capitalists have increasingly 
been providing later stage capi- 
tal,' concedes Tony Lorenz, 
managing director of ECI Ven- 
tures. 

•Venture capital is hardly 


Attitudes to investment 


Why ‘venture’ is 
not so capital 

Charles Batchelor on a growing aversion to risk funding 







anorak*'. ,* r. .« t 


venturesome in many cases,* 
complains Anthony Costley- 
White, co-founder of Oxford 
Seed corn Capital, a small fttnd 
which backs very early stage 
projects. Two-thirds of the 
ftinds behave more like banks. 
People are finding it just as dif- 
ficult as ever to raise real risk 
capital/ 

Why is venture capital appar- 
ently failing to live up to its 
name? The answer lies partly in 
the experiences of the early pi- 
oneers, who introduced the 
technique to Britain from the 
US, where it was already well 
established. 

The early funds, run mainly 
by the banks and the estab- 
lished City institutions, rapidly 
built up ambitions portfolios of 
young, high-risk companies, 
many of which promptly re- 
warded them by going bust 
Memories of one of the early 
Electra Investment Trust ftinds, 
which reaped a substantial har- 
vest of 'lemons', still sends shiv- 
ers down the spines of manag- 
ers in the industry. 

'A number of the companies 
formed in the early 1980s were 
fairly visibly unsuccessful,' re- 
calls Lucius Cary, editor of The 
Venture Capital Report Inves- 
tors became nervous and the 
knock-on effect was that the in- 
dustry became more risk 
averse:' 

Venture capitalists could af- 
ford to ignore the riskier deals 
because the popularity of the 
buy-out presented them with an 


. Source: Ventura Economies?' 


almost guaranteed high level of 
return on far safer Investments. 

By their very nature, compa- 
nies suitable for a management 
buy-out are well established, 
have a tried and tested manage- 
ment team and are in mature in- 
dustries producing solid profits 
and cash flow to pay off the 
debt The time between buy-out 
and stock market notation has 
been shortening so investors 
know they will get a rapid pay- 
back. Start-up companies, by 
contrast, may be five or seven 
years from liftoff - if they ever 
get that far. *We didn’t have 
time to educate our backers 
that venture capital was a 
longterm investment before the 
stock market went wild and they 
were getting quick returns,' 
says Lorenz. 

Finally, the early venture 
capitalists, with vex; limited 
ftinds to invest, were prepared 
to devote the time and effort to 
researching a small company, 
and helping it through its early 
difficult years. As the size of the 
ftinds has grown it has ceased to 
be economic for the typical 
small buy-ont team to devote 
much energy to an Investment 
of £50.000 or £100,000. They have 
moved upscale and most will 
not consider an investment of 
less than £250,000 or even 
£500JXK)l 

Opinion differs in the indus- 
try as to whether the present 
move to buy-outs is permanent 
or a short-term trend. Bryan 
Wood, co-founder of Alta Berke- 


ley Associates, a fund with a 
large number of high-tech in- 
vestments, believes the industry 
- in Britain as in the.US - moves 
in cycles. 

There will be a time when 
buy-outs won’t be so attractive,* 
he forecasts. 'People will get 
back to more early-stage invest- 
ments - though they will be 
more selective.* Others, howev- 
er, feel that there are funda- 
mental differences between 
venture capital on the two aides 
of the Atlantic. 

It is difficult in the UK to 
build a big high-tech business 
because of the smallness of the 
market” notes Sue Lloyd, man- 
aging director of Venture Eco- 
nomics, a specialist consultan- 
cy. "What British venture 
capitalists are looking for is a 
high-growth, high-margin busi- 
ness and that is just as likely to 
be in fast food.' 

"If an idea clicks in the US 
you will have a $50xn company,* 
says Mark Scibor-RyUki of the 
Charterhouse Japhet Venture 
Fund. "One of those would allow, 
you to let the rest die and still 
get a good return on your poztfo- 

A1 though the US venture cap- 
ital industry is generally re- 
garded as more willing to take 
risk there has been a swing 
away from high-tech invest- 
ments there too. 

There are the same broad 
trends in the US as in the UK - 
but not as pronounced,* says Ed 


Miller of Concord Partners, a 
New York venture capital fund. 
"Five years ago you were not 
considered a true venture capi- 
talist unless you put 70 per cent 
of your money Into high-tech 
deals. Now everyone talks 
about backing specialty retail- 
ing.' 

But does it matter that ven- 
ture capitalists on both sides of 
the Atlantic appear to be shun- 
ning risk? Wood claims that the 
worthwhile companies are still 
being backed though the entre- 
preneur may not be getting 
quite the deal he wanted. 

This argument is difficult to 
refute because the deals which 
do not get done do not show up 
in the statistics. Costley-White 
feels it does matter because 
there is no-one else to fill the 
gap. There are good projects 
which foil by the wayside,* 

notes Carv. 

Certainly concern at this de- 
velopment has prompted a num- 
ber of British vesture managers 
to look for a way to boost the 
flow of ftinds to the younger, 
more innovative companies. 

ECI Ventures makes what it 
calls ‘cornerstone* i nvestm ents 
in other specialist or regional 
ftinds to spread the risk. It bag 
stakes in Prelude Technology 
Investments, a Cambridge- 
based fond specialising in early 
high-tech ventures; In Avon En- 
terprise Fund in Bristol; and in 
Darnaway Venture Capital, 
based in Edinburgh. 

Scibor-Rylksi at Charter- 
house Japhet believes risks can 
be reduced by a more active 
cultivation of the companies al- 
ready in the venture manager’s 
portfolio. Such companies 
could be encouraged to use 
their knowledge of their indus- 
tries to make start-up invest- 
ments or form links with other 
small companies. 

In addition, he says, .venture 
companies should be more will- 
ing to compare their portfolios 
and ^put ^ t oge th er ^com panies 

on their own, but together make 
a viable operation. 

Despite the need for efforts 
like this to Improve the flow of 
ftinds to innovative young firms 
t he^gl cture is not' completely 


A small number of the larger 
UK ftinds - between 10 and 20, 
according to most estimates - 
have maintained their commit- 
ment to financing the riskier 
ventures. They have managed to 
convince their backers - the in- 
stitutions - that this approach 
works and have been successful 

in raising eaMjtTnnfl l ftiwde thi« 

year. . 

But they are very aware that 
sentiment accounts for nothing 
in the venture capital business. 
The industry is judged on the 
high returns it promises to 
match tiie high level of risk. 
■People don't have to do start- 
ups,* notes Alta Berkeley’s 
Bryan Wood. "What they are 
obliged to do is make money.” 


Survey discovers a fund of 
‘hidden’ ventures in Europe 


CORPORATE venturing, 
whereby large corporations 
provide financial hacking for 
small innovative companies, 
may be mere widespread than 
was previously thought. Well- 
established In the US, it ap- 
peared to have found less fa- 
vour in Europe and elsewhere. 

But a recent world-wide sur- 
vey* by The Conference Board, 
an independent US-based re- 
search organisation, revealed 
that 88 (84 per cent) of the 154 
International companies 
polled had carried out some 
form of corporate venturing. 

Of the 98, more than half said 
they were satisfied with the re- 
sults to date; a ftirther quarter 
said it was too emty to measure 
the results while the remain- 
ing quarter expressed varying 


BY CHARLES BATCHELOR 

degrees of dissatisfaction. 

The most common objective 
in establishing a vent uring 
link was an attractive return 
on investment Others were to 
open a window on new technol- 
ogy; to achieve growth and di- 
versification; and to enhance 
the entrepreneurial spirit in 
the large company sponsor. 

Twenty five of the companies 
reported problems in connec- 
tion with their venture pro- 
grammes. Some ran mto man- 
agement' difficulties when 
their partner changed Its ob- 
jectives or foiled to stick to an 
agreement. Others had prob- 
lems achieving a balance be- 
tween exercising control ever 
•the venture without stifling its 
autonomy. 

Several sponsors reported 


operational difficulties in get- 
ting ail parties - subsidiaries, . 

entrepreneurs and managers - 
to work together, while two 
voiced concerns about possible 
conflicts of interest when a 
company had provided both 
defat and equity flnance to a 
venture organisation which 
had got Into trouble. 

Sponsors should remain 
aware of the risks associated 
with corporate venturing, the 
board wants, citing an earlier 
(1882) study which showed that 
GO per cent of all ventures had 
foiled and of the 40 per cent 
which remained viable only a 
quarter had done "very well/ 

•Corporate Venturing, The 
Conference Board* Ave Louise 
207, Box 5, B-I050 Brussels, Bet- 
grum. 


Avoiding insolvency 


JUST ONE creditor doggedly 
pursuing a debt of £750 coaid 
threaten your entire business, 
according to u guide mi How to 
avoid Insolvency*, published 
this week by the National Fed- 
eration of Self-Employed and 
Small Bus! nesses. 

Unless you res p ond quickly 
to any creditor’s demand for 
payment, or c ou n te r cl aim that 
the debt is net outstanding, 
then the first stage of bank- 
ruptcy or the liquidation of 
your co m pa ny may be com- 
menced, the 12-page study 


Produced as a guide to the 
implications of the Insolvency 
Act 188S for the federation’s 
SMN members It takes the 
email businessman through 
the stages which can lead to fi- 
nancial disinter 
If legal action Is started 
against a company, the ow n e r 
may suddenly flad he is no lon- 
ger able to jaggle Us financial 
resou r ces since all his credi- 
tors will want their mane; im- 
mediately. The assets of the 
company win have to be val- 
ued, probably at much less 
than their tree worth, the 
guide' 


It lists the early warning 
signs which the null busi- 
ness most watch Cur. These be- 
gin with tee unexpected devet- 
spnsmrt, such as a dip in sties 
«r a burglary, which upsets a 
company's cashflow plans. 

If a creditor suddenly tiros 
of chasing ywn by letter ar by 
phene he may issue a legal 
wanting - which should net he 
ignored. Delegating payments, 
because yon are HI or on holi- 


day, leaves yea vulnerable 
since Ignorance or foflure to 
.respond to a court summons or 
a writ will not save yon from 
the Brat stage of insolvency, it 
cautious. 

Finally, legal warnings 
should never be ignored. Ad- 
vice should cither be sought 
.from your solicitor or joe 
should respond fay Phone, a vis- 
it or a letter. 

The key to avoiding all these 
problems Is to have up-to-date 
management information on 
the state of year business at all 
times, tee guide notes. 

•Available from the federa- 
tion, 240 Lower Marsh Street, 
Westminster Bridge, London 
SB1 7 AE. Td 01 928 9272.0. 

Marketing 

workshops 

HELP FOR SHALL Anns to 
tackle their marketing prob- 
lems has been the focus of in- 
creased attention in the UK 
lately. Following the lntrodae- 
tfou earlier this year of the 
Support for Marketing scheme, 
under which firms can call on 
subsidised management con- 
sultancy advice, a programme 
of two-hour workshops entitled 
Marketing your Business has 
now been branched. 

The pro gramme , which has 
the backing of Lloyds Bank, 
the Institute'of Marketing and 
the Department of Employ- 
ment, will be held around 
Britain over the next two 
months. It promises to help 


small firms develop a 
'down-to-earth marketing pro- 
gramme.' 

Specific subjects to be cov- 
ered are finding out about the 
market place; gaining an ad- 
vantage on the competition; 
and how to overcome fears 
about selling. 

According to Tony McBur- 
nie, director general of the In- 
stitute of Marketing, speaking 
at the programme’s launch last 
week, two-thirds of British 
firms admit they are not good 
at marketing; that they do not 
use market research and that 
their managing director has no 
real marketing or sales experi- 
ence. Yet marketing is the 
skill which is required if in- 
dustry is to capitalise on im- 
provements in productivity 
mafe in recent years, he ad- 
ded. 

Businessmen attending (he 
Marketing Your Business sem- 
inars will receive a video, a 
marketing plan checklist and a 
reference book on the subject 
Cost of the workshops, which 
start at &30pn. Is £25 pins 
VAT. Each session la limned 
to 50 places. 

Small business Interest in 
the subject was evident from 
the strength of demand for the 
earlier Support for Marketing 
scheme. The government origi- 
nally committed £2Jm to this 
scheme but later raised tt to 
£K25u. A total of 1X00 busi- 
nesses are exp e cted to receive 
management consultancy ad- 
vice under this programme 
thisyear. 

For details about the Market- 
ing Your Business seminars 
contact IM Marketing Training, 
Moor Hall , Cookham, Maiden- 
head. Berks SLB 9HQ. Tel: 
06285 24922 ext 2228. 


Business Opportunities 

KJUBU ME RECHnn Ti SB* AFfiOfWIE FMFEBMUt UVKE WBWE BnBSR Hit MMTH 0 TS 


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package - crucial if you’re new to foe fund caisiqg environment. 

For further fafonnfflxmcanJcimlteu^iky, Bryan Mcxiey or 
Guy Eaton on 

01-4081424 

or write to us at 

LONDON FUNDING & MANAGEMENT PLC 
The Financial Catalyst 
140 Pbrk Lane 
Loudon 
WIY3AA 


Tticx 269215 (LNFUNDG) 


Roc 01-491 8993 Q 


PARTNER REQUIRED 

For West End Management Consultancy 

We are active with major industrial clients as well as smaller, 
venture capital-backed companies. We need someone who; 

* is a clear business thinker 

* knows modern management techniques 

* applies theory in a practical way 

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No capital investment required. 

Write in confidence to Box F772S, Financial Times, 

10 fiannan Street London EC4P 4BY 


WE MUST CO 
ON MEETING 
LIKE THIS. 


Cash Flow Eased 
at Reasonable Rates 

If your company has sums cf money tied 
up In good quality debtors you ccn turn 
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bfils of exchange or an Invoice discounting 
facility at rates of Interest that may be less 
than your bank is currently charging you. 
Alexanders Discount pip. established In 
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Discount Market Association, have for 
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for tiether information please write or phone: 

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ACQUISITION: 


U.K. HEALTH & BEAlflY PRODUCTS 


Wb wish to acquire s ubsta n ti al brands in the LUC. health 
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LEASING 

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marine project 

mated to 

tajsa l a,*g‘te % 



48V 


Dealing Room and Computer 

Wiring 

SmW rapMng Gomounlcalem 
wipe* tooled tab catittaWtefci 
aatftotagttrofHS dnfag mm 
aeftnnm fei to Ctystj summing ate, 
Meta Bttfebnal canvas. WfteBot 
F77» Ranchi Ikne, lOCannon Sam. 
London EC4P46Y 


EXPANSION FINANCE FOR 
GROWING COMPANIES 

Barry EMnb & AmocMm is an 
at exports who 


m halpkig 
■nonce to expWan end dnraiapnwra. Our 
expense to »i% supported try an bMorarad 
penrtno mvico Vet hcfcides 

Coipof a ra France Mert noito g 
Advertising Penning S ReMerch and 
Oedr Management 
1H; Ol-sm 390r or wrse trc 
{ferry Edrarda & Aseodetas 
WS ttn ho p eTbrraco 
London W23TU 


COMMERCIAL 

FINANCE 

Competitive Rates 
10 - 26 % fixed interest Mort ga ge s 
BuUneN Finance to 80% of can 
Aaset-tesad finance 
Construction Rneoce to 100% 


OOHW US HtS (L0HP0H| LIP 
ftp own 633a 
foe 01-379 41B2 


Not Destructive 
Testing Company 

MOT Conpary has lengthening 
outer book end unique iro a n v ai cna l 
matwy and dvfl aerospace product 
Requires £300/100 investment id 
service expansion. Corporate plan 
awkfale. For brtierrtatalB write to 
BaxNo. F7740. RnencM Tnws. 10 
Cannon Street. London EC4P4SY 


Recent* tamed comparer wen 0*00000 

heed ewes tactaSrg seeing up costs. 

4 producing doner tVfr rasrtng 


developed piodudM mar l si de - radar 

book me. She net rrorMng capM. fl ee *! 

pesneritmneiuiAiHigH. (Ttanoer 


iNBUOfHINIJBf. 
craoMfy Elm wkh appro* 2S% Mt prcA}. 
Cep fcd iaradedtrcmgojoa 
Bp* NclJ P 7744. PhrancW Times, « 
Caron Sees*. London EC4P ear 


AeqiMUonMargar or 
Association erfth Sheet Metal 
fo&rfcator eougM far vartfeal 

bfmselLm M i A ita*a 

myiiDonwKil E j m i w iy 

product range, p ri ncip l es or 
edvteom. 


F774Z, fihanoW Tinea. fOCaonoe 
Street, toaden EOIP4BV 


Rapidly expanding 
•stabffstMd Designer 
Knitwear Company 
Meks backer. 

Apriy Box No. F7738, Ftaanehi 
Tbnse, 10 Cannon Street 
London EC4P48Y 


■agWnEBED ORAITOTV SURVEYORS 

S«Mi murxfing wodtod ea* 

nrondanhiee.il> 
’ *8Y 


aa* 

ComonSoera. 


















23 


*W4> V.v., 


nd 


FmancMTimcsTucsdayNovcmbcr 3 1987 

Business Opportunities 


FOR FREE DETAILS OF 
OVER 800 LONDON 
BUSINESSES FOR 
SALE THIS WEEK 
TELEPHONE: 
01-530-7555 EXT 213 


CAPITAL AVAILABLE 

For Imestomt to tafeesa 
seeking to expand or sUut-op 
.Foods aaUaMe tor many propc dU ota 




r« Hand, KC9 1HT 
Tdt MW 579999 

• MetfKr «f FIMMA 


HD- CHIEF EXECUTIVE 

SUCWWM senior executive in 
rrod 40's with proven track, 
record sews c ^nera} 


MORTGAGES AND 
RE-MORTGAGES 

From 10% Fixed 
Tel: 01-546 8857 

Ifaybury A Company, Finance 
Brokers. 16a St JamnrtSL, 
LmdonSWi 


n NANCE FOR EXPORTS 
IMPORTS it UK TRADE 

BACK TO BACK LETTERS 
OF CREDIT 

Svttcrf to jour rrqufmortj 


management pontoon In nqxx 
and wholesale. 

Write Box F7730, Financial 
Times. io Cannon Street. 
London EC4P4BY 



Corporate TV Prediction 
Company, bse-raritihg butwfti 
BfuecWpCRent 1st good pfan 
and newrMD seeks inwestmant 
andtor fusion with 
complementary Co’s. 

Bw No. F77S1 , RnancU TImM, 10 
Cannon Smm; London EC4P48Y 


Non Executive 
Director (PLC) 

Seeks farther work tor 1988. 
In teresting work is more 

L| manlfMl a 

hi^OtUsii mann nancaairBwaroL 
Bax No. F7732, Financial 
Tones. 10 Cannon Street, 
London 6C4P4BY 


ProfesstoratiTean require 
FtaancH Partner for 
Residential Refurttishment 
schemes fo Central London. 

Box NolF 7733, Financial 

Times, Id Cannon Sheet; 
London EC4P4BY 


We buy/ull 


i j r »v . > K'J' « ; Vtoau k 


' OmniVentores 
Kontnginnfegracht ltt 
2514 AL The Hagoe 
The Netherlands 
.Coil 31-70-447097 
F*X n-7tM59290 



MOM-TECH FROH DBA Canny Mh 1 
Band-NwrWcWoOT wi PAKTKXE-StZE- 
ANALYStS h tooidnoTor flap) i In Eun>pn. V. 
yon mn the cortncto nth thn pracm In* 
duarian nliw txmtad Lwr Saner %dv 
rafcnv. me, under Bor No. 0^116012 m 
Pu3Sh.CH 0001 Ban. 


Buying 


ti— m gw* .">1 wwfai jniilff "li. If 

itonid reader job £qW« tor damages as well as 
i£yt M i aer , y a€*x£iuiL>- . 





BUSINESS FINANCE 


> Property or Budnas Purefaaa 
1 Commercial Monpia 
1 Botinae* Expansion 
1 Mm H wmnc Buy-Oini 
i Babncc 9 k« Lcfxflnc 

' forfhmcMAM* 



01-930 9631 


WANTED! 

SURPLUS, OBSOLETE & 
LIQUIDATION STOCKS 




took 
Contact us OK 
BrirfoT (0272) 290320 
London 01-441 5757 
Shrewsbury (0743)245428 




OPENING AN OFFICE IN 
NEW YORK CITY? 

rn And ytw Office Space, Attorneys, 
Ac c o u nt an ts, Banks, Staffing and Housing 
Contact Aidree Owner Aroctartes 
00 Setton Place, Seath New York, 
New York 10822 


LIMITED COMPANIES 


UK and International 
Isle of Man &Non-Resident 


e 


WE ORGANIZE 

Conference, Canvmdons. 
MectUvp. Sendnara. Exhibitions, 
Company Ptta cn tntiom, Spore 
Events, ond Company Days Out 


[y ' '"i n *■ r»*rat; 




IIVI CIM 

Institute 

Th* Stmitgie bigwrunaa and Incite ■liana of - 
Computer Intagratad Wtamdaetiirlng 
Programme of Ttanr-Day Exacutlva Comas 
NO VCMBEK- JANUAftY-FCSflUAAY-MARCH 

* omotc KXfnmnusmess MUmiM 


Ciuflaad. Baflard WMSOMU 
Tot {02341 7SZ7T3 




Businesses for Sale 


Announcing a new, 


/ 


service 


for 


sales of businesses. 



Pfimirtkerr ForsM . - _ 



'EE^T&Ui^ v ' 


Be 

6r '.J 


Robson Rhodes 
~$pi£er and 

SwHqyuxv* . 

-. Touche Ross . : 




I f you’ve a business for 
■ sale you now hove a 
much better way of finding 
the right buyer, faster. 

Britain’s 15 leading firms 
of Accountants have got 
together to provide a new, 
totally confidential service. 

As port of the Accountants 
Business Network they can 
enter brief, anonymous details 
of your business for sale into a 
shared computerised database. 
The information is then available 
to potential purchasers from 
the extensive client and 


FOOD PRODUCTS 
COMPANY SOUGHT 

Our client is seeking to expand by 
acquisition of a food products manu- A 
facruret JKh 

The company's products could JRKi 
indude ingredients, flavourings, syrups 
processed fonts, specialist baking or J& 
confectionery. Turnover range £1 million j? 
to £5 million. ^ 

Interested parties please contact; 

Ian Nelson, Ernst &. Whinney, 

Becket House, 1 Lambeth Palace jASr 
Road. London SE1 7EU. 

Telephone: 01-928 2000. j&fjr 
Fax: 01-928 1345. Telex: ^£8^ 

885234 ERNSLO 


H Ernst & Whinney 

Acajunmna, Advisees, Consultants 


CHESHAM. 

BECAUSE YOU ONLY SELL 
YOURBUSINESS ONCE. 

Chesham are the leading merger 
brokers in Britain and have confidential 
briefs from several hundred public 
company chairmen, who are looking to 
buy successful, private companies worth 
£500,000 to £25m. 

If you’re thinking of selling your 
business, contact our Managing Director 
to arrange a confidential discussion. 


CHESHAM 
• AMALGAMATIONS 

The first name in mergerbroking. 


Asdley Hoose, 9 North AmHey Street, London, W1Y1WF. 

Telephone: 01 -«9 5917. ' ■ * 


~r ,v , f 




\ 


contact networks of a]l 
the member firms. 


By the same token, 
■1^ prospective buyers also 
now have a much wider 
r choice. 

It seems to us, as 
Chartered Accountants, to 
add up to a great deal of 
sense for ail concerned. 
Contact any member firm for 
full details. 



Roofing 

Contractors 

Cambridge 

The Joint AdmWstrativB Receivers offer for sale 
the business and trading assets of a wbH 
established roofing contractor in Cambridge: 
The main features indude:- 

► Twenty year lease on 0.66 acre site In central 
CanibridgevvilhpiamingperTnlsstonfor 
office development a nd warehouse. 

► Skflted workforce. 

to Order book In excess of £300,000. 

► Current turnover fri excess of £1 milionper 
annum, 

F^furtherdetatepteaseoxitact- 
MaricBafioeBScACA.Arthu’ Young, 
a Compaa* House, 80 NewmaalwtRoad, 

A Cambridge, CK80ZLTMephone: 0223 481200. 
ZIa TWe*f8tmt Fax: 0223 32480&. 

Arthur Young 


AiyOtBEROFART>tJBYO(iNGNTEFtNArK>NAL 


B0UNCEAB0UTS C LEISURE 

(In liquidation) 

Offers are inviiBdfcr the business and the assets of this 

aril I rncM/n firm which rfwrigrw: and n uwnfiim i n wi 
infiarabte Iomie pnadaos, vtemre play areas and theme 


CONSUMER & INDUSTRIAL PRESS LTD 

(in Administration) 

PUBLISHERS OF THE MONTHLY 
MAGAZINE “PINS AND NEEDLES” 

The Joint Administrators offer for sate the business 
and assets of the above company which produces a 
monthly knitting/sewing/craft magazine. 

* Magazine established in 1949. 

* Turnover approx. £400,000 per annum. 

* Circulation 33,000 (ABC 1986) and readership 
435,000 (NRS 1986/87). 

* Premises in central London with 6 editorial/sales/ 
admin staft 


For further information please contact:- 
Martm Fishman or Jackie Stephenson, 
Arthur Andersen and Co., 

P.O. Box 55, 

1 Surrey Street. 

London WC2R2NT 
Telephone: 01-836 1200 
Tetex: 8812711 
Fax:01-831 1133 



.Arthur 

Andersen 


Skanfish Limited 

(in Receivership) 

Trice Frozen 
Foods Limited 

(ioRecehrenhlp) 

The Joint Administrative Fteceivers otter tor sale 
ttie following assets relating to the business erf 
processing and freezing fish and other foods: 

► comprehensively equipped frozen fish 
processing plant in leasehold dockside 
premises of 13200 sq ft 

► fuBy equipped frozen food packaging business 
in modem leasehold unit of 6000 sq fL 

Fbr further information please contact: 

DH Slade, Arthur Young, 

Commercial Union House, Albert Square, 
Man che s ter M26LRW No: 081-831 7854. 
Telex: 6G7947AYMA. Fax: 061 -832 4124. 
or MTDobeU, Arthur Ybung, 

A Barclays House, 6 East Parade, 

Leeds LS1 1 HA. let No: 0532434844. 
lelex: 557354 AYLS. Rax: 0532 44224L 

Arthur Young 


A(i£M8EROFARTHllRYtX/NQINTERNAnONAL 




MIDLANDS BASED STRUCTURAL 
STEELWORKBUSINESS 

(nominated subcontractor to bine chip 
companies) 


part of its long terindevek^jment programme. 
This long established division offers a turn- 
over of approximately £L5m, with gross 
margins m excess of 33%. 

The division is ofered for sale with full 
commercial and technical management team, 
order book and order related stocks. Certain 
unique application plant could also be available 
for sale. Interested parties should contact in the 
first instance: 

I. A. Bowland 


J cMf fc l Peat Marwick McLintock 
Acquisition Services 


45 Church Street. Birmingham B32DL. 


Chaumet Limited 
(In Administration) 

The joint adminisfratorsofler for sale the business and assds 
of Chaumet United, the high quality retail jeweller. Principal 
features include: 

• Prestigious long leasehold premises in New Bond Street, 
London Wl. 

• High class showrooms and ample office space above. 

• Full range of stock. 

• Established in London for 40 years 

•Turnover of £4.4 million in year ended 31 December1986. 

• Profitbefo^etaxandexcE^ionati1ems£551 l 000i^yea , 
ended 31 December 1986. 



| • h. -r | J N i 

1 lM, fTrr"i 

\ "if. ; j v ^ j. . % , i / E 


Nil 1 ' •* •ifi . HflNBIltooAttalfl 


The fim operates from leas eh old premises in flic 
Midlands wfafch'enjpy first dass access K> the 
motorways. Hie skilled workforce produce good quality 
equipment which is sold through an nnematlcMul 
network of agents resulting in a strong Oder book. 

BANNELL Rxrferthcrdeiaik please ccanact:— 


FORSTER 

Ihanefl Kar Footer 


HontrtairHonse, 


3 Hocsc&k Street, Lekcstee. 


Tyephonc (0533) 25334 


TUex 341005 


Fax (0533) 20105 




® hUNTLEY & PARTNERS 


Wxttnlta Fradmm, Rutmaot «Wi Flttt, C>Mb l CMarSta^ 
StCrtiwtolwrwwIiiafBBBtorilar rill aB^ CiM ^BB^ mttmy. I mnacata* property 
■dill tamjr Hr, 16 Umay hi *rite ea bt m, 2 hnwy (hta cWlubtU « The An. 
UnrioiiML T/0 appm ewomoia DtiJaHW Hstaes s protWrg leMfr Mb horot.. 
SnhMhonf. MaM£flSMttV> LW 

48 HBtlq Plata, PljmmUi PU U£ 

Tab (0752)282511 


PHOTOGRAPHIC PROCESSING MANUFACTURERS 

WAINCO INTERNATIONAL LTD 

For sale by the joint administrative receivers 
The business of 

Manufacturers of colour and black & white film and paper 
processors in the commercial and military fields operating 
out of 37,000 Sq. FL in S.W. Cambridgeshire. 

To include designs, trade marks, plant and machinery, stock, 
leasehold premises and customer lists. 

Please apply to: 

David Sapte or Shirley Jackson 
Beghle Norton & Partners, 1 Raymond Buildings, 
Grays Inn, London WC1B5B3L Telephone: 01-438 2321. 


Medical Health 
Screening 

ManuIacturingandsGftngrifltmfofsalOQfCQmpleJeriJBdfcd 
heaRh screening system, together with fuHy wrung 
production prototype console and customised software. 

For further information, please contact- 
VivtonM.Bairsto^FCA.ArthtrWning, 

A Kings Court, 185 Kings Road, needing, 

M Berkshire RG1 4EX, Telephone; 0734 533T71, 

LJU TWetox: 0734 503105, THex: 848683 AYRG. 

Arthur Young 


A MEMBER OF ARTHUR YOUNG INTERNATIONAL 


FOR SALE 

SATELLITE RECEIVES SYSTEMS DISTRIBUTOR 
Voy Pi riMto, Weil EftsMUied. Uodera Lsndor Wmhoue. 

Current Tanner £2m+. profits c. E240JIOD, 

Based v a auttm «nn* pwlod nr 2 jten. He dweMtors mUi to sen to ca* or paulUw tar 
uwtt to a Bsud crew eUdi ««1 be able to the uaipanfs ndttoa 
Serion enquiries to: 

0. MAHUDTT FCA 

„ __ MAMM1T SECUWT1ES LIU 

SSSfiSrinSB* T»t 014588387 

London NW119AB Fac D1-Z09(HZ7 



















Financial Times Tuesday November 3 1987 


Businesses For Sale 



RETAILERS OF TOOLS AND 
MACHINERY 

These two long established companies based in 
Centra! London retail hand tools and electric power 
tools both for professional tradesmen and the general 
DIY market and also sell heavy duty machinery 
They have a combined turnover of approximately 
£500.000. 

For the turtherintormation please contact 

ifHSBpeat Marwick McLintock 

l Puddle Dock, Blackfiriars, London EC4V3PD 

SH Telephone: (01) 2368000 Te\er. 8811541 



bejay ices limited 

IN RECEIVERSHIP 

TlwAitadaistratiTC Receiver offers Pur sale the bisftie® and assrt of theataie rattan* 
operating hi Manor Park, 02 area. The company Is a manfechra- and wholesaler of 
1 Ice Cream. 

Main Particulars are: 

* Valuable Leasehold Properly 

* Plant and Machinery 

* Approximately 18 refrigerated was 

* Stock of Ice cream and materials 

* Tnnwrer approximately £500,000 p4. 

f0 , ^ SWGL* AW COL 

Chartered Accoentants, 

49 Qoaans Victoria Street London EC4N 4SA. 

Telephone: 01-236 2184. 


A privately owned engineering company, which designs and 
manufactures special and standard products far blue chip 
customers has doubled in the last 4 years and is stiB growing. 
The company has an order book of £5.5 million and has 
modem C.N.C. manufacturing facilities with spare capacity. 
To double its T/O in the next 4 years fa £10 million the 
company needs to merge, to be purchased, or to purchase a 
{flee company. This could solve the problem of an engineering 
group that owns a company performing averagely, has 
outdated facilities and is short of turn-over. 

Write Box H2769, Financial Times, 

10 Cannon Street, London, EC4P 4BY 


JOINERY MANUFACTURER, Nomsgbsn am. Manly window * door te net. 
Turnover ttAfxfl 1987 £&59£00 @ 22% pnc. X eaqdaytex, comprehensive jinx A 
■— Intel 14JXX) kjA. fcaiwld factory. Prioo £250,000. 

PLASTERING CONTRACTOR, iodndra Dqr Lining nd Qmc Mu c. An 
- Iwi— In Em Midtindc wtih roneg o i mugcma t. B ttn enan. Tfo to April 
1987 n£l JlOOJIOQ. Net pn&aw£10QjOQO. Pace £300000. 

CARAVAN, CAMPING A GARDEN SUPPLIES * manuka. Half aaertsitt 
Ifidhnd mwn wi* mendm covered Showroom rod outdoor dhplqr & poking m. 
Taking* far 1986 top £460.000 £ 27% gna profit. Site A property freehold. Wee 
£230000 lu rcag y w iy A «"*». 


EVEJHB7T, MASSON A FURRY LTD 
Ctealien, Whrakr Gate. NoUegtera NG1 SB 


CARPET AND SOFT FURNISHINGS COMPANY 
FOR SALE 

Well estabfished prime retail business, based in South- 
West, Freehold outlets totaling 7,000 sq.ft turnoverin - 
-excess of £800,000. : Excellent prospects for expansion. .. 
Principals only reply to Box No H2767, Financial Times, 
10 Cannon Street, London EC4P 4BY 


FOR SALE 

Expandng Builders Merchants & D.I.Y. in busy Essex 
Town T/O £840,00 p. a., £200,00 induefing fixed assets 
plusSAV 

Apply Box H2780 

Financial Times, 10 Cannon Street, EC4P 4BY 


BUSINESS 
FOR SALE 

Long established Jewellers, 
prime position in major 
shopping area, turnover In 
excess of £*2 million, with 
freehold available. 

i Please write to Box 
F7728, Financial Times, 
10 Cannon Street, 
London, EC4P 4BY. 



PUBLISHERS 

Wish lo dbpose of exfsffeg tiBe, 
notin aSgnment with their 
curant products. 

Contact Bax HZ782 
Financial Timas, 10 Cmncn 
Sooet, London EC4P48Y 


OFFSHORE 

small Air Texi (AjO.C Holder) 
and Brokerage « v» n« i y Id 
the Channel Iilandi for sale, for 
farther details write ux 
Bed H2766, P a ran c U Timet. 

10 Carman Sam, 

London EC4P 4BY 



Private Limited Company for 
sale. Treeing fosses in excess 
of £200,000 agreed whh Tax 
Inspector. Previously retailed 
furniture, beddng, carpets and 
electrical goods. 

Write Box F7734 
Financial Times, 

10 Cannon Street, 
London. EC4P 4BY 


RESTAURANT IN 
CAPETOWN SA. 
Seats 50 people 
PRICE FOR QUICK 
SALE £35,000 


Office Equipment 


PUm Hire And Traffic Row 
Gonro an y for sale. Profitable 
f unify business. Profits n 
excess of £10GK. Price 
n epmiiMe . 

- Principals only write to the 

ehairmat, 

Bax H2756, Rnrodal Times, 

- io Caanoa Sneer. London, 

EC4P48Y 


FOR SALE 

AMBM Rang e ‘O wn Brand- 
based domestic ctasnng 
taataring • P«*k* 1 2f"fl 

Compare offered fer s ate w hh.Qf 
wittnB existing «<e teJ-SA 
aerosol Wng company aeettia own 

Write Box HZ75B RianeM Timm, 

10 Cannon Sveet, London. 

EC4P48Y 


Profitable, expending. East 
Midlands Wn pi wf^ i n ^ Fn ,; "r t* 
with eeaUbhed pndxu. mm* 
over approadrisg £0 l 5 million. 
Goad eosumcr base. 

Writ* Bax H2759 
Financial Tones, 10 Catmm 
Street, Loadoa, EC4P 4BY 

LONG ESTABLISHED 
PHOTOGRAPttC 
PR0CESSMB STUDIO In 
WEST BO OF LOM>ON 
FOR SALE 

prinapataarfyneedapplyto 
Box HZ7B6. Fhendal Tlnae, 

10 Canaan Stmt. London. 
EC4P48Y 


USACOhOUERClAL 
CONSTRUCTION COW 1 ANY 

Fandy owned business over toy 
years 

Prime oeaw Boeaon, 


Businesses Wanted 

ENGINEERING PLC 
SEEKS ACQUISITION 

Expanding PubSc Company with substantial resources 
operating in the engineering sector seeks to acquire a wed 
managed business with a proven record and current pretax 
profits in the region of £200,000 p.a. or greater. Wa 
encourage and reward progressive management in our 
Subsidiaries and have ampie finance avaBabte for expansion 
programmes. Companies si present considering a USM or 
BES approach could well be Interested In joining our Group 
and the consideration for the purchase can be based on 
cash, equity or an appropriate mix. We are particularly 
interested m companies engaged in the manufacture of 
gafvanized rafted or pressed steel products, but we wifi give 
serious consideration to any profitable business allied to 

Principals only, please write in confidence to Box H2763, 
FmanaalTimes, 10 Cannon Street, London EC4P 4BY 


Volume 5 mflton, write saw retiiel 
Mtmrkifo sand rawtte ter 
PXt Bor 78s 

Wicft—ter. Mmol OtaaOL USA 


PLC 

Wishes to acquire the following 
Stockbrokers 
Licensed Deposit Takers 
Lloyds and Independent Insurance Brokers 

Please reply to Box F7727, Financial Times, 
10 Cannon Street, London EC4P 4BY 


CAHU INVESTHBfT AND HANAOStBfT 
EXPBmSE FOB YOUR COMMNY 

If you are a Principal or m^or investor in a oompany 
ttaerequme g a dditional fimttnfr there a re several 
options open to you. 

If you fed that nondynamic management is also 


FIRST 

INDEPENDENT 

CORPORATE 

FINANCE 

. WANTED 

FMlMMtlM 

Osr tOM with experience at tbo Kttw m 
tadarti 7 mb roftwt toots vttpacntuitt 

DVpwd 

OardlattcM otter fl— nrUlxwfl minimi mrt 
Upra tofotter wMi • (baif teWtaf bte 
Tan Mold tin mnd tedraicxl rx p ci t H e. ■ 
ttodratne xp»nrtiwt beo|iB iWiiK lnteiPldi 
atwM 
Knot ctxxacC- 
Bag. 

IJttotMtiMKUW 

TtL Ql'MXI 2t» 


VICEROY 

AHALGAMATIOtiS LTD 

We are Mly retained by PLO* 
and private efients whom 
interested In acquiring compa- 
ntes in afl sectors afbidustry 
andco mm erca. WewWbs 
pleased to tak to sofieftors, 
accounta n ts, trusts and 

vendore in the strictest 
confidence. 

Contact us on: 

Britt* (0272) 290320 

London 01*441 5757 


There is no 


totheseRsr 



Pri vxt d y craned group van to 
boy employment •gancera, 
f^pwratly tboee -iridx ine-mra 
h oMmgtoDpoiny stiff in 
empottf or fiasndal rnttixu. 
HcriUe ama ge m e u ra for 

»nitiii»H owner meseaement 
- -* »- 
pOHBXC. 

KepSra to Bear H2772, 


MONCOLAND 


required, we can) 


i with both. 


Easfly run profitable fkwsh 
mffit distributbn business 
for sale - 6,000 gallons per 
week-skuatedinSoiAh 
East London. 

10 Cannon Street, 
London, EC4P 4BY 


Central LimmIob 

Refurbishment 

Contractor For Sate, 

WooM Mi nedhmrimd eooucu 


fbmesDpIy uBoc H2779 
noalTnea. 10 Groaoe SB 
L«kxiEC«P4BY 


AAA-EUROPEAN 
COMPANIES FOR SALE 

Genns>w. 3 wlO eite nd.^>ten 
E£00D0P€lSm 
4-Sar Hatete, Enj^warirn. 
BactroricB, Refcfl/Whotoe*. 
Foods, Sports. PR raxi more. 
Sedous buyers ady 
Cal Pok Asms. 

Tel 01-838 1233 


Pfeare write fo total cor^denceta- 
Mr D Moon, Moncoland Associates, 
Chatsworth House, 29/3 1 Broadway, 
Maidenhead, Berks. SL6 ILY 

INFORMATION 

PUBLISHING 

Leading British publsher of business/professional 
information and reference works seeks to expand its 
pubBshing and information services interests by 
acqusirion of profitable companies or ptdiBcalfons. 
PRINCIPALS SHOULD SEND FULL DETAILS IN 
STRICT CONFIDENCE TO: 

Box H2404, Financial Times 
10 Cannon Street, London EC4P4BY 


EC4P4BY 


Recnnbneut Ageadn 
Wasted 


agencies wah solid cUcra bus 
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/fts/7 INVESTOR’S 
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25 




St jjy Financial Times Tuesday November 3 1987 

. t\ • • .... . . 


> in j-l 

. *1 tw - !*■ 

* 26 <%l* 
v 

*tre 


ARTS 


National Portrait Gallery/David Piper 


^ * £ 


Glamorous images of feminine elegance 


*i - 

-<r,’ 






■ ■“ v ^ av * ta> Wn- his major contribution to the im? 

- k SSrSSf® to ev gPp rate hmn age of the marriage of Victorian 
' e '£ ei1 frwn spedal- regality and domesticity (but 

TW* ** a rather sadly, apparently not 
•' . 5H!£j£ ^though he does not, available for this exhibition, 

em ®2 e ' a * ? Phmeer which is overall admirably se- 
^^ohrtions of lected to represent the full-range 
2U2EN&3fflW2r artd quality of hi* work). 

oocted the recipes for his sub- At heart, he seems to have re- 
. je F s PWyuoett'gBunnrous Images mained happy within the social 
4 f" *5 eal feminijne elegance anointment. He never presumed 
■- . . mim modem man - and, I trust, on his contacts or h!s abilities. 
' l ^ oderT1 woman - might well and was uninterested in social 
• 2**?? 88 even if imposa- climbing; he had a solid self-«s- 
' . , .? ve ” “» Geologically, unde- teem, immune to the extrava- 
drable. Even if. In the exhlbi- gances of more spectacular art- 
“®i * nvan was complaining of a fete in the tradition of romantic 

lack of pictures “of normal peo- geniuses. He was devotedly in- 
ple - only posh show-offs’, I a usurious, and became discretely 
heard there too positive rnunnu- rich. Delacroix thought he was a 
*’ rations of pleasure. bit of a bore. He h»Hn» appeal for 

Winterhalter, bom In fairer £ 25*5 SffiffiK 


3? 


f$§§^ 






- SrtTtaigtaiaa s 

G^iiiany^m 1805, hadpainted by avoid the company of inferiors 
in 1873 perhaps but also not to invol 


*#:•; ' ' ?/* T&t , ' . ,v .... 

'f&i 4/' 


■■■ ■ - 


the tune he died 
more emperors; kings, queens, 
princes, princesses, arch dukes 
and so forth than, any artist ever. 
Yet apparently the only one-man 
show of his work in Britain was 
that at Knoedlers in 1936. The 
major winter exhibition at the 
National Portrait Gallery, Win - 
terhaller and the Courts i * 
rope, 18SO-L870' offers at last a 
truly representative showing 
(until 10 January; £2> It Is to be 
re-staged in Paris at the Petit 


ve himself in 
the world fay a liaison with a 
fashionable woman. He re- 
mained unmarried, in rectitude, 
no breath of scandal. He 
■correct." 






Palais (February-May); it was in 
Paris that the artist for long 
probahly felt most at home, and 
in the climate of the Empress 
Eugenie's court produced his 
most successful work. His por- 
traits of her suggest that he may 
have found her nis most sympa- 
thetic subject. 


His critical rec 
lifetime tended to 


in his 
dismissive 


Bis technique was rooted in a 
. ... neo-classic belief in clarity of 
Eu- contour, established by David 
and developed by Ingres, but by 
Winterhalter applied to subjects 
generally lacking in heroic ideal- 
ism. His group "Florinda* is the- 
matically related to major paint- 
ings by Titian, beautiful young ? rani 

women disrobing in. a glade ana lflCe > holding a rose, against 
discovered by a voyeur, yet of ®toimy sky, pained with a more 
the most genteel propriety - contrived one of Albert in dark 
snapped up Dy Queen Victoria In uniform (but splendid with in- 
1862 and hung In her sitting sfenia of the Golden Fleece and 
room. It is impossible to Imagine the Garter - and still, though 
the aged Ingres's extraordinary s°on to be lost, his hair). The 
celebration of the nude, the 
Turkish Bath," 1862, still 


"Queen Victoria and Prince Arthur,* 1850, by Winterhalter 


IQs forte lay with women of 
the highest rank and fashoin, 
and (sometimes) their children. 
His first success with Queen Vic- 
toria, 1842, was a straightfor- 
ward figure in white satin and 
holding a 


cleaned canvases can delight the come from Russia, Poland, Aus- 
tria, France, Belgium, and many 

ish Royal 


y-k 


or nil, though his cosm 
clients loved it. Both in 
and In England (especially the 
latter), his Torefgrmess stung na- 
tive jealousies. A rival painter 
once called Sir Thomas Lawr- 
ence a "mere man- millin er paint- 
er, a meteor of fashion/ and 
comparable accusations were 
levelled at Winterhalter, but he 
could, contrary-wise, equally be 
found guilty of producing "sen- 
sual and fleshy visions™ coarse- 
ness in the details - such an 
odour, we may say, of paint, and 
such a want of taste as make us 
frankly rejoice that it is not from 
the hand of an Englishman." 

That remark was occasioned 
by his group of Albert, Victoria 
and the royal children -' perhaps 


Manet’s very d ifferen t "Glympe” 
of the year after, being so cho- 
sen. Winterhalter remained aloof 
from novel artistic 'movements, 
whether of the Nazarenes in Ger- 
many, the burgeoning Impres- 
sionists In France, or the Pre-Ra- 
phaeUtes in England. 

His groups, whether genre or 
portrait, lack inner tension and 
can seem assemblages (that of 
Eugenie amongst her ladies is an 
exception, but Is represented in 
London only by a rather Wat- 
teau-bh study). His court por- 
traits of men often stiffly up- 
right, thin as stick insects yet 
gorgeous in thigh boots, tight 
white breeches and dark jackets 
laden with hold braid, are not 
very 


soon to be lost, his hair), 
couple went on to commission 
over a hundred works from Win- 
terhalter, some of them often re- 
peated or copied, and becoming 
widely known through prints. 
Their taste bad moved away 
from the romantic brio of Lawr- 
ence's followers to artists closer 
to the continental academic 
style, like Hayter, and then John 
Partridge, but Winterhalter's tal- 
ent ana accomplishment sup- 
planted them entirely. He came 
to Buckingham Palace, Windsor 
and Osborne frequently in the 
1850s and 1860s. 

When the name of Winterhal- 
ter has been remembered. It has 
tended to be synonymous with 
"chocolate box." At times the 
gloss - especially if the paint has 
never been cleaned and is fjbmA 
with old crackled varnish - can 
be unappetising, but recently 


palate indeed as the best choco- 
late, and not cloy. The range too 
is far from despicable. On a 
small scale he can be extremely 
on g agin g , 83 in a vision, in a 
frame of gilt rosebuds, of Victo- 
ria reclining on the terrace at 
Os borne, in a swathe of pink 
tulle and positively Mediterra- 
nean weather - or a brisk little 
oil sketch, handled with sponta- 
neous freedom, of the Princess 
Beatrice aged two on I860, romp- 
ing In pink. 

A favourite formula was to set 
the figure against a darkish 
background, fit from above and 
slightly behind. The body h seen 
in a profile, the face turned al- 
most nilL The bell shape of dress 
suits an oval frame very aptly, 
and in the 60s the silk and satin 
of the dress may often be veiled 


moreal, and pearls glisten. The 
sitter’s face is firmly individual- 
ised even If, as often, glowing in 
half -shadow In reflected light. 

The exhibition b presented in 
an elegant concoction * washed 
agricot on peach, then bbcuit- 


by 


. with marbled columns - 
Barry Mazur. Loans have 


from the British Royal Collection 
- but only one from an Engish 
public collection (Port Sunlight, 
inevitably). A sign of the times 
perhaps is that one of the very 
few loans from American collec- 
tions if from the Getty Museum 
at Malibu, a recent acquisition: a 
remarkable full-scale reclining 
wholelength of the great beauty 
Princess Leonllla of Sayn-Witfc- 
genstein-Sayn of 1842. It b Win- 
terhalter's tour-de-force on the 
Madame Recamier theme, but set 
in the Riviera-like balm of the 
Crimean summer. Beauty though 
she was, baking in the late af- 
ternoon sun, her face again 
in reflected Ught in half- 
An essence of the best 
flattery lies perhaps not in gild- 
ing the illy bit in a certain econ- 
omy of the truth. 

Tbe exhibition b sponsored by 
United Technologies Corpora- 
tion, and there b to be a magnif- 
icent Winterhalter-costume ball 
at the Reform Club on December 
12 in aid of the Gallery's Trust 
Fund. There b an aptly sumptu- 
ous catalogue/monograph that 
records a great deal of fresh re- 
search, much of it by the prime 
mover in the exhibition, Richard 
Ormond. 


Cosi fan tutte/Oxford 


ORS 

OTHE 

1 ARKET 

«SL«rAM 


Peter Hall's Glyndefao u rne 
Cost, third and last of his great. 

Da Ponte productions -of the' 

1970s, b in its final seaaoa rtita, 
current Glytideboume Touring* 

Opera performances will be its 
last. At the Apollo, Oxford, an 
Friday, regret at the impending 
disappearance was somewhat di- 
minished, for the touring edition 

S f Stephen Lawless) appears to 
ve moved some way from the . 
original, in some respects to Its 
detriment. 

Hall’s extraordinary achieve- 
ment at Glyndeboume had been 
to scrap conventional Cost farce 
and flummery, to insist on obser- 
vant and above ail natural char- 
acterization, to dig deep into the 
deepening discomfort and dis- 
tress of the play without losing 
the comedy. Mr Lawless appears 
to have reinstated a certain 
amount of the older Cosi tradi- 
tion; the comic effects (at such 
moments as the first announce- 
ment of the soldiers’ departure^ 
or the sisters' collapse onto a 
chaise longue after *Smanle Im- 
placabili”) are not at all coarsely 
or insensitively arrived at, but 
the peculiar sober intensity of 
the original production is at no 
point recaptured. 

What b on tour, in fact, il l 
well-rehearsed and quite attrac- 
lively cast conventional Cast, is in fine 


MaxLoppert 

ss Of superior polish 
id by the . excellent 
(frOodv 


with A 
provldi 
pbytng 

securely controlled 
conducting of Graeme Jenkins - 
no Winding insights or exposure 
of disturbing emotional under- 
currents, but scrupulously paced 
and balanced to suit the voices 
and the odd (bit actually rather 
enjoyable) Oxford acoustical dry- 
ness. People encountering their 
first Cost thb way will have a 
good deal to be grateful for (even 
if the beastly surtides leave out 
at least half the necessary infor- 
mation, while anticipating for 
the audience some of the jokes 
before the performers them- 
selves have cracked them). But 
the further dimensions of the 
opera were only faintly adum- 
brated - in thb respect, at * 
it was not really 
Cosi. 

The strengths of the cast, Al- 
fonso and Despina, and the rela- 
tive lack of distinctive personali- 
ty among the lovers did, 
however, fund the evening with 
a potent sense of the wire-pull-, 
ing cruelty beneath the comedy. 
It was a brilliant idea to present 
John Shirley-Quirk, whom we 
have all teen and heard, far too 
seldom on the lyric Msgs, as Al- 
fonso. The age fa right, the voice 
trim, and under a fo- 



ment, free of spirit, and no less 
cynical; the voice has a smoky 
colouring that suggests intrigu- 
ing subtexts of its own. 

Agalnst such formid ab le opera- 
tors the central quartet doesn't 
stand much or a chance. Mark 
Tinkler (of whose recent Scottish 
Billy Budd 1 retain happy memo- 
ries) is a bland, vocally unfo- 
cussed, though notably promis- 
ing Gugiielmo; John 
Graham-Hall (Ferrando) has a 
real voice - in spite of ids Suc- 
cessful Glyndeboume Albert 
Herring, hes no SpieUenor - but 
an 

roand of it (one 
him to someone like Leopold Si- 
moneau for lessons in Mowtian 
smoothness). Anne Mason's Dor- 
abefia, competent as ever, falls to 
occupy her space As Fiontiligi 
the young Dutch soprano Anna- 
geer Stumphius b similarly reti- 
cent of manner, but graces the 
nde with beautifully pure, tight, 
unforced tone and style - thb b 
a singer to whose future appear- 
ances, and steady future devel- 
opment, one looks forward with 
some relish. 


alarmingly incomplete com- 
nd of it (one longs to send 


Rostropovich/Festival Hall 


R ic ha rd Fafrman 


Like the virtuosos of the 19th 
century, Rostropovich has in- 
spired the great composers of hb 
qay to write for him- Of course, . 
he is not alone among’contempo- 
rary musicians in that (one 
thinks especially of the legacy 
left by FeaW and Bemac in the 
Grid of song) but there b surely 
no other single artist who has 
been the source of great music 
Cram such a range of sources. 

At Saturday night's concert, 
the sixth in his birthday celebra- 
tions, we reached two peaks of 
the contemporary cello reper- 
toire. Shostakovich wrote hb 
First Cello Concerto for Rostro- 
povich in I960 and the determi- 
nation of tins work to scale ev- 
ery summit of - expressive 
intensity gives some idea of the 
impact made by the young cel- 
list's playing; the solo part, in- 
variably a lone voice, communi- 
cates on the grandest scale. 

Nowhere is thb more evident 
than in the heartrending slow 
movement and subsequent solo 
cadenza. After hearing Rostro- 
povich hold hb audience intent 
on every note of the score, it b 
difficult to believe that any oth- 
er performer could make thb 
music speak with 'more of its 
soul; for thb was playing that 
had every colour of yearning and 
loneliness, of that very special 
Russian feeling of desolation. 


There is not a bar of thb con- 
certo that does not have Rostro- 
povich^ personality stamped up- 
on it. And though same may 
not,' perhaps, be said or Proko- 
fiev 'a Sinfonia Concvrtante, 
that too b a work on which he 
had a formative influence and 
for which he is uniquely well 
suited. In revising his earlier Cel- 
lo Concerto, Prokofiev had taken 
note of one of hb Soloist's most 
outstanding features - hb phe- 
nomenal technical command - 
and rewrote accordingly. 

Indeed, the central movement 
is quite a feast in itself. The fear- 



point 

tions to come. Here, 
all was accomplished with daz- 
8ldll ana, though Rostro- 
■ occasionally glanced over 
shoulder as if expecting more 
dramatic support, Seiji 
and the London Symphony Or- 
chestra never failed turn in vig- 
our and energy. 


ing. Even Boccherini’s slight 
Concerto in D had any amount 
of tone colours and expressive 
nuance lavished upon ft, as 
though to prove once and for all 
that there are no minor musical 
works, only minor performances. 


Private City/Sadler’s Wells 


The two novelties to London in 
Sadler's Wells Theatre Ballet's 
programme on Friday night 
could not have been more con- 
trasted in manner or in com] 
nents. 1 reported on the 
of Susan Crow's Private City 
and Derek Deane's The Picture 
of Dorian Gray from Birmingh- 
am in March and my feelings 
about the merits of the Qrst ami 
the rampant impossibility of the 
second were confirmed on fur- 
ther acquaintance. 

, Private City takes Its Inspira- 
tion from A&J.Tessimond's po- 
em about London, “the reticent, 
the private city,’ and conveys in 
delicate fashion something of the 
dreams and traumas of its inhab- 
itants. There b a fine set by Tim 
Shortall of leaning pillars which 
frame a distant architectural 
prospect - Mr. Shortall is an ac- 
quisition to ballet - in which 
Miss Crow's can move almost 
ghost-like in their shiny plastic 
garments. A fascinating score by 
John Suzman is an improvisation 
by the composer on soprano sax- 
ophone ana bass clarinet against 
an electronic background: it cap- 


Clement Crisp 

tuns with fine accuracy a feel- 
ing of evanescent gaiety and 
melancholy, and has inspired in 
Mbs Crow dances whose purpose 
and dramatic validity seems 
much dearer than at the work’s 

first performance. 

People meet, pass on, are 
caught in moods joyous or con- 
templative, and we sense the 
mystery as wdl as the more ob- 
vious aspects of urban life. The 
ballet, in its understated style, 
tells of something vivid that its 
choreographer has found in Tes- 
simond's poem, and a literary 
source has been respected. This, 

aba , is just what Derek Deane 
has shown himself unable to do 
with hb fin do siecle capricdo. 
There seems little point in dying 
'to make danced melodrama from 
the fevered taradiddle of the 
Wilde originaL 

Dance rails signally to explore 
the motives and the hectic ener- 
gy of the tale, and Mr Deane 
(who b a musically sensitive en- 


large cast rampage in period 
dress, looking for all the world 
like players in 
wood costume ... 
the 1940s. Led by Pettier Jacobs- 
son as Dorian, 


some dire Holly- 
costume extravaganza of 
' by Pettier Jacobs- 
the dancers be- 


have badly, mumming and ca- 
vorting as aristas and derelicts: 
none of them, convince us that 
what they are presenting is more 
than a lurid charade. 

Mr Deane, as we know from 
earlier works, is too skilled a 
maker of dances to have to rely 
upon these factitious dramatic 
tncks, where production replaces 
movement as a justification for 
the enterprise. 

The evening, fortunately, end- 
ed with Paquita, which reassert- 
ed the name of the company as 
dance ensemble, with Sandra 
Madgwick in the leading role. A 
particular charm of her perform- 
ance lies in the fact that the 
more arduous the ch 


er design by Peter Farmer, a 


the more buoyantly happy 
her dancing become. It was en- 
tirely true on thb occasion - her 
variations shone with a bright 
and ex hilara ti ng fire. 


Chilingkian Quartet/Elizabeth Hall 


In three fortnightly co n certs the 
Chflingirian Quartet have been 
paying tribute to the memory of 
Peter Schidlof, lamented Ama- 
deus Quartet violist. At Sun- 
day's, the middle of the series, 
the quartet played Haydn's 
Op. 33 no.2, "The Joke”, and 
(with Steven laser lis as second 
cellist) the Schubert Quintet: 
sound, unexceptionable, unre- 
markable performances of a kind 
hard to write about accurately 
without becoming patronizing. 
In the Haydn, the intonation of 
the quartet leader took a while 
to settle (thb b a perennial Ghil- 
ingfrfan weak point), but, when 
it did, the performance included 
most of the Haydn virtues except 
those of sparkle and wit (the si- 
lent bars of the finale didn't 
quite achieve frill comic sus- 


MaxLoppert 

pense). The interplay of lines in 
the Schubert was lively, accom- 
plished, not really dramatic - one 
never felt huge risks being, tak- 
en, mighty feats of daring es- 
sayed. 

Mr bserlb also joined the Chil- 
ingirian for the first perfor- 
mance of Stephen Doagson's 
three-movement Quintet (198®)- 
Hard, once again, to enumerate 
the virtues of Dodgson's latest 
piece of chamber music without 
seeming to underrate them. It is 
a highly accomplished example 
of string quintet writing - in the 
opening bam the division of the 
material between the upper 
three and. lower two voices Is 
expertly done, and later, when 



purpose, and salutes hb superior 
craftsman's skills. 

It b a tonal work occupying an 
area bounded, roughly, by Jana- 
cek at one end and Britten 
(whose late "suite-movement" 
style and rhythmic elegance are 
notable models in the outer 
movements) and Tippett (whose 
bouncy, recognizably English 
contrapuntal working informs 
more than one passage). The 
Dodgson Quintet can be fol- 
lowed, honestly and clearly, as 
argument of a civilized, lucid 
land from beginning to end. At 
the same time, 1 have to admit to 
a feeling during its course ol fa- 
miliarity with lb sound and sub- 
stance, and of disappointment by 
lb dose with the gentility of ib 
alms and ambitions. 


London New Music/Purcell Room 


Sunday's concert by thb ensem- 
ble was deeply laid-back, and in- 
offensive as could be (except for 
the unexplained absence from 
the programme of the Maurldo 
Kagd piano trio originally an- 
nounced, which was the main 
reason for attending). Even the 
with timpani was modestly 
rofile ana with other pieces 
entitled "Amnesia," "Aparta" and 
‘ it was a concert that al- 

ready 1 can barely remember 
having heard. 1 expect the Kegel 
had Just slipped their collects, ve 
mind. 

• bucad of Kagd wrhad John* 
Gage's complete music for violin 
ana piano, which consists merely 
of six Moodies and a Nocturne 
composed four decades ago: the 
Melodies spare and quite genu- 
inely folksy, the Nocturne a 
peaceful frieze of standard noc- 
turne-gambits, drained of energy 
but elegant (as the earlier Cage 
unfailingly was - later Cage too, 
if it comes to that, but in a dif- 


Davld Murray 

f event tone of voice). The violin 
was only tolerably secure with 
Cage's prescribed non-vibrato 
and glassy harmonics, and the 
double-stops in the Nocturne. 

It all took four minutes less 
than Anthony Marks' new “Apo- 
ria-Sonata" for clarinet and pia- 
no, which in four continuous 
movements proved that Hindem- 
ith b, if not exactly not dead, at 
least not forgotten. It had the 
marks of honest low-profile feel- 
ing, but also most of the surface 
features of Hindemith at his 
most imi table, a considerable -dis- 
traction. London New Muftic had 
begun, naturally enough, with 
the tiny epilogue from Christo- 
pher Fox’s 90-minute chamber 
cycle Heliotropes. Ib pungent 
little clarinet-duo fanfares over 
ethereal vibraphone notes 
(bowed, not struck) gave no due 
to how Fox may sustain the pri- 
or 87 minutes, for "Heliotrope 7" 
is strictly undeveloped. 


Gerald Barry's was a 

1979 nonet, re-mstrumentsted as 
a sextet for LNM. Most of it b 
short lengths of ascending chro- 
matic scales, and the chief dra- 
matic thrill b the addition of 
some descending bib (sometimes 
with a small squeal at the top); 
after tan minutes of that, slower 
parallel chords make a sort of 
chorale-coda. Passing gaps in the 
scales sounded inadvertent, but 
may have been intended. Amid 
thb company "Amnesia' seemed 
a dubious title for Matteo Far- 
gkm’s new sextet (the piece with 
the timpani), since in its pawky 
it shuffled and dealt ib 
distinct elements quite pur- 
posefully. One never believed 
that ft didn't know where It was 
going: though Farglon played 
with apparent inconsequence, 
his wittily fractured sequence of 
po-faced musical statements 
made cool, tight musical sense. 

of Kagel wasn't, after 


Thesp] 
all, en 


absent. 


Chris Rea/Wembley Arena 


Chris Rea fa one of thoee artiste 
who packs out Wembley Arena, 
but dbereetiy. He sells lots of 
albums around the world, but 
rarely bothers the media. Thb b 
mainly because hb music, al- 
though aimed at the relatively 
young, b blatantly middle of the 
road. It b Indeed the perfect ac- 
companiment when driving the 
car, but hardly stops you in your 
tracks oh the domestic radio, 
where tt hovers somewhere be- 
tween Radios One and Two. But 
if you do start listening, and 
manage to distinguish, one song 
from the other, which takes 
some time, it u easy to get 


Antony Thomcroft 

hooked. 

At Wembley on Saturday hb 
audience was as good as gold, 
applauding politely, clapping 
along when told to, and only ris- 
ing to lto collective feet when 
Rea let go with “Lets Dance". Hb 
two hour set was wonderfully 
paced and by the end you Just 
about knew that you'd been to a 
rock and roll concert I suppose 
the big criticism is that you start 
comparing him with other art- 
ists. "He's the English Jackson 
Browne’ you say when he starts 
one of hb mournful lost love bal- 
lads; then you get carried away 


and see lob of St 
such son& as “Steel River". 

Rea is more bland In concert 
than on record. Hb voice loses 
something of ib Geordie growl 
But he plays the guitar beautiful- 
ly, and how few singer-songwri- 
ters can add that third string to 
their technique; and he has 
packed hb band with profession- 
als, three of them on keyboards, 
including one who dresses like a 
pig former. Chris Rea might only 
have street credibility in Wey- 
bridge, but he b well worth giv- 
ing a lift to on a trip down the 
motorway. 




Arts guide 


October 30 - November 5 



Opera and Ballet 

LONDON 

Bml opera. Covent Garden: final 
performances of die new Nozzedi 
Figaro, conducted by Bernard Hai- 
tink, produced by Johannes 
ScbaaL with a firsfrrate cast In- 
cluding Claudio Desderi, Thomas 
Allen/ Karita Blattila. ***"• 
McLaughlin »"«* Sarah Walker (240 
10661 


English National Opera, Coliseum: 
One of the company's. biggest bits 
of recent years, Jonathan Millers 
updated mafia-style Higoletm re- 
turns with John Rawnsley. David 
Kendall and Anne Dawson in the 
east and Paul Daniel as conductor. 
Further performances of the musi- 
cally excellent, dramatically rath- 
er weak new production of The 
pearl Fishers and of the. striking 
Werther with Arthur Davies and 
Ann Murray conducted by Mar* 
Elder (836 3161). 


Spectacle Group (Groupe do Re- 
cherche Choreographique de 
I ’Opera de Paris) choreographed 
by Ulysses Dove, Francois Verret 
and Carolyne Carlson at the Opera 
Comiqhe (42900611). 
a Festival ] 


THE BET OF TASTE: | 

MIX A BEEFEATER 
MARTINI 


Take Beefeater Gin anddryWrrKXjJJi 
a proportion anywhere from 21 to 1 to 5 to i. 
pour into an ice cold mixing glass wnn ice, 
stirand then strain. Add a twistof lemon. 

Chcorsl 

For a recipe leaflet which fu/tf^r demorctrates 
v am exoeliaTceaixtversa^ 

wiry 



I Ballet wtth Eugene 
choreographed by John 

i with Natalia Makarova and 
Peter Schanfliss . Theat re dea 
Champs Elyseea (47208837). 


WEST GERMANY 


Bertfe, Deutsche (ton: A guest per- 
formance Gy the Alvin Auey Amer- 
ican Dance Theatre. Also a guest 
performance by the London Royal 
Ballet Covent Garden with Stra- 
vinsky’s Fire bird/Scenes de Bal- 
letfrho Rite of Spring, choreo- 
graphed by Mikhail. Fofcine, 
Frederick Ashton and Kenneth 
MacMillan (343 81)- 

Hamburg, st*«t*open 1 a Boheme 
fent&raa Julia Cornwell, Rachel 
and Francois le Roux, 
auf Naxos b conducted 
Seibel and' has 
Hartwlg, Gertrud Hoflb- 
udtth Bocknuuu and Toni 
In the main parts. 
KwuD, Helen Donate, Yo- 
iwahara and Harald Stamm 
The Magic Flute. Die Ent- 
— an* dem Send! is also in 
and The Nutcracker, 
ed by John Nenmein 
-with Jessica Font, Bet- 
D Ock man h, Jeffrey Kirk and 
Id Manferdlnl (351151). 


Opera: the Frankfort nrt? 

Opera under ib new director Gary with 

Bertini opens the new season with 
two ‘operas by Christoph Willibald 
Glnek, Iphigcnie in Anlb and Iphi- 
genie auf Totals. They will be the 
first productions in Germany of 
Greek producer Michael Caeoyan- 

nis, famous for the film Zorba the 
Greek. The sets are by Dion isb P»< 
topoolos, the conductor Gary Bar- 
tini The cut includes Clarry Bar- 
tea and Gabriele Maria Bong*, 
bote tuns to their roles; John Broe- 
cheler, nWijana Llpovsek, Curtis 
Rayaa and Vladimir deKanaL 


ib premiere thb week wnn me 
led by Martha Modi Nadine 
Seeunde and Josef Protschka 
Hiafcm their debut as XJu and Her- 
mann. Dimitri! Kitaj enko conducts 
for the first time in Cologne. Der 
Barbier von Seville rounds off the 
week. (2 07 6H 

Stuttgart, Wuerttemberglsehes 
Sfaatstheater: Die Entfoehrnng 
ana dem SeraiL produced by 
Nlels-Peter Rudolph will have lb 
premiere this week. The cast 
brings Krisxtina Laid, Yasnko Ka- 
zakh Dwe Heilmann and Helmut 

Berger-Tnna together (2 03 21). 


NEW YORK 

Mtetropo M tau Opera (Opera House): 
The first seasonal performance of 
Franco Zeffirelli's production of 
La Bob erne conducted by Julius 
Rndel highlights the week with 
Roberta Alexander and Brian 
Scbeznayder. Continuing are Otto 
Schenks production of Die Walfc- 
ceitfemd by Junes Levine 

Hildeuard Behrens, Timothy 

Jen kins and Bans Sotin; and Fran- 
co Zeffirelli's production of Tosca, 
conducted hr Christian Baden 
with Eva Horton, Sherrill MHn— 
and Italo T«|a Lincoln Center (362 
600Q). 


Frank Corao's production, 
with Tunmdot Lincoln Center 
5570). 


ducal by 


. !»«»* 
will hero 


New YMtaty Opera: The week fea- 
tures Jack Hocda's- production of 
The Student Prince, conducted by 
Paul GemlgnanL with Leigh 
Hunro, Dominic Crate and Jon 


Garrison in tee title role. Perfor- 
mances include Tosca. with Eliza- 
beth HOlleque In the title role con- 
ducted by Alessandro Sicilian! in 

Joflkcy Ballet (City Center): The 
month-long schedule has three 
premieres, including a Robert Jef- 
frey Nutcracker, Nijinsky's Le 
Sacre de Printemps and Three 
Preludes by Ben Stevenson set to 
Ridunauinav, alone irith Freder- 
iek Aabton'a La Filie Mai Gardee 

and nearly 24 repertory favourite*. 
Ends NOV 22. 55th E. of 7th Av. (MT 


Bucket Dubm Theatre (Joyce): .Garth 
Fagan's m odern company, with Af- 
rican and Caribbean flavours, pre- 
miere Passion Distanced and 
Traipsing through the May. 1758th 
AvatUtS St C242O60Q). 


TOKYO 

Deutsche Opera Berlin: 5legMed 
from Wagner’s Ring, director Gob 
PriedriraT orchestra conducted by 
Jems Lopez Cobos. Soloists in- 
clude Robert Bale. Horet Hletoa> 
mann, Gottfried Honuk, Paniela 
Bechly, Ct**diu Jedwi- 

ga Rappe. Tokyo Bunka Balka n 
(Wedjtf 


San Francfsco Ballet: works include 
The Dreamer, choreographed by 
Jerome Robbins; Concerto in D, 
Poulenc, choreographed by artis- 
tic director Helgl Tomasson; 
Themeand Variations, choreo- 
graphed by George Balanchine. 
Tokyo City PhllharmonK Grebe*- 

Tnes. Wed) (573 3588). 


Saleroom/Antony Thomcroft 

Still money around 


The City still has same surplus 
cash. The Ironmongers Company 
paid £26,400 at Christie's yester- 
day for a punch bowl made in 
in the early 19th * 


China 

at the request of 
les Price who was master of 
the Ironmongers Company and 
Lord Mayor of London in 1802. 
Or it could have been a present 
to commemorate hb achieve- 
ments. The price was nicely 
within forecast 

The bowl b decorated with 
two paintings of contemporary 
London: on one side there is the 
classical facade of the Mansion 
House; on the other Fen church 
Street The painting is reckoned 
to be among the fined recorded 
on Chinese export porcelain of 
thb period. The scenes are taken 
from two wen known enrgrav- 
ings of around 1750 from which 
the Chinese craftsmen worked. 

The auction of Chinese export 
porcelain totalled £166,881 from 
the morning session, but wtth 30 
per cent unsold. It seems to be a 
characteristic of recent weeks 
that the top lob find buyers but 
that run or the mill antiques are 
out of favour. Obviously the 
market is very cautious, 
an Italian dealer, paid £14; 
for a rare Camille rose pronk sau- 
cer dish. Cortnelis Pronk was 
.commissioned by the Dutch East 
’India Company in the early I8th 
century to produce models and 
designs to be produced In the 
(East after the insatisfactory re- 
sults produced by designers and 
potters in Delft. A similar Pronk 
saucer dish made £6^00. Both 
lahow a woman with' a parasol. 


one of the nine known pronk 
patterns. 

Once a year in November Soth- 
eby's holds a major sale of 
Dutch, Flemish and German 
drawings in Amsterdam. It hap- 
pened yesterday, and totalled 
5341,753, with 21 per cent un- 
sold. Thb relatively high figure 
was mainly attributable to a red 
chalk drawing by Rubens or Mo- 
ses striking the rock, unsold at 
£53,000. On the positive side a 
private collector outbid the Lon- 
don dealer Baskett & Day for 
some studies of the head of a fox 
attributed to Van Dyck. They 
went for £82^90 as against an 
estimate of around £20000. A re- 
cord auction price of £24,689 was 
paid by the New York dealer Bob 
Haboldt for a male nude by Ad- 
riaen van de Velde, 

Sotheby's suffered a setback in 
New York on Saturday when a 
Louis XIV ormolu mounted brass 
and tortoiseshell-inlaid ebony 
bookcase, attributed to the great 
Andre-Charles Bouile, failed to 
find a buyer. The size - It mea- 
sures over 12 feet in length - of 
the piece, and the ornate medal- 
lion at ib centre, suggest that it 
.was a royal commission, perhaps 
by the King himself for his own 
appartment at Versailles. Despite 
the best efforts of Sotheby's to 
confirm this regal origin, and the 
fact that it hadbeen in the col- 
lection of Baron Gustave de 
Rothschild for many years, there 
was no buyer prepared to pay 
around Sim for 1 l 

The auction totalled £1,913£83 
($3(344,495). 


I 


26 


Financial Times Tuesday November 3 1887 


FINANCIAL TIMES 

BRACKEN HOUSE, CANNON STREET LONDON EC4 P4BV 
Telegrams: Finantimo, London PS4. Telex: 8954871 
Telephone: 01-248 8000 


Tuesday November 3 1887 


Gorbachev’s 

socialism 


THE SOVIET Union is celebrat- 
ing 70 years of socialism with a 
long; searching look in the mir- 
ror, and is finding the courage 
and confidence to admit that it 
is not a pretty sight. 

That is not to say that the 
strict regime of diet and exer- 
cise prescribed by its leaden 
will be joyfalfy undertaken or 
rigidly adhered to. But Hr Mik- 
hail Gorbachev’s keynote 
speech in Moscow yesterday, 
and the reaction to it, indicate 
that the Soviet people stand 
poised at the start not of a ma- 
jor change of direction but of a 
major re-evaluation of where 
socialism has brought them and 
where they want it to go. 

That the direction remains 
unchanged -was clear from Hr 
Gorbachev’s assessment of the 
Stalin years, bat he has set in 
train a new reading of Lenin. 
Professor Nina TnmarfciiUn the 
excellent guide The Soviet 
Union Today*, has catalogued 
the earlier version sz the mar- 
tyred hero of genius in the 
1920s, the dead Lenin as "pedes- 
tal for the living Stalin* of 
1934-53, the "benign dimpled 
gentleman in soft focus* of the 
Khrushchev era. Now we have a 
fourth version: the scourge of 
bureaucracy and creator of the 
New Economic Policy with its 
emphasis on individual eco- 
nomic initiative. The Russians 
are finding, like the Chinese be- 
fore them, that it does not mat 
ter whether their cats are black 
or white so long as they catch 
mice. 

Stalin’s legacy 

Tn making public his denunci- 
ation of Stalin's crlmek, Mr Gor- 
bachev has gone farther than 
his precursor Nikita Khrush- 
chev, whose "secret speech" to 
the twentieth party congress in 
1956 remains unpublished in 
toe Soviet Union. Even so, he 
did not spell out the foil horror 
of those crimes. "Many thou- 
sands of party members and 
non-members were subjected to 
mass repressions*, be said , 
whereas among western and un- 
official Soviet hlstorians>20m is a 
conservative estimate for the 
number of deaths. 

And, in opening up the sub- 
ject for discussion, Mr Gorbach- 
ev defended important aspects 
of Stalin's legacy. Though the 
'crimes and excesses’ were 
enormous and unforgivable, he 
said, the policies they imposed - 
the forced collectivisation of 


forms and the race to industri- 
alise - were essential if the 
cause of the revolution were to 
survive: ’No other course could 
be taken.* These omissions and 
reser v a ti ons should serve to 
dispel any illusions that he is 
planning to construct a market 
economy or introduce "bour- 
geois* democracy. . 

Mr Gorbachev’s passionate 
commitment to socialism has 
never been in doubt. He, more 
than anyone, is convinced that 
it can be made to work. If be 
appears determined that his ef- 
forts should not be dissipated 
by over-zealous, over-enthusias- 
tic supporters whose actions 
may require him to fight on too 
many fronts at once, that should 
not be taken as a sign of readi- 
ness to bow before the conser- 
vative opposition. 

Confident leader 

On the contrary Hr Gorbach- 
ev, launching the anniversary 
celebrations, looks like a su- 
premely confident leader who 
knows where be is going, and, 
while aware of the obstacles 
confronting him, sees no need 
to change course because of 
them. 

Many in the West, lookin g ap- 
provingly at his efforts to re- 
shape Soviet society, wonder 
whether he can survive, wheth- 
er the forces of conservatism 
will not do for him as they did 
for Khrushchev. That may be to 
misunderstand toe nature of his 
power. He is perhaps more real- 
istically seen as a traditional 
Russian leader - the latest in 
the long line of tsars. If he of- 
fers his people pZasnost and de- 
mocratization, it is his offer, 
and is being made on his terms, 
as hi« nnmiifahhv warning to 
supporters such as the Moscow 
party chief; Boris Yeltsin, has 
made clear. 

The West should app r ov e and 
support his efforts to make the 
Soviet machine ftanctton more 
efficiently and to the benefit of 
its people. But it should not 
overtook the nature of the ma- 
chine: not only its real stance to 
change, but also the feet that it 
contains no real check on toe 
driving force at the centre. 

It was the Soviet system which 
produced Stalin, as much as the 
other way round; the feet that 
Mr Gorbaehev-iahighly aware of, 
thin pwttt 'considers It tnconsis-' 
tent with true socialism is no 

safeguard * p lnlrf «♦ hap p»nnlng 

again. 


China’s drive 
for reform 


CHINA'S PARTY congress has 
ended in apparent triumph for 
Peking’s reformists, who now 
look set to cany the conn by in- 
to the 1990s. While Deng Xiaop- 
ing, the country’s reform-mind- 
ed supreme leader, hat 
resigned from most of his key 
posts, he has taken with him the 
majority of the conservative 70- 
and 80 -year-olds who previously 
sat on top party councils. Ibis is 
all toe more surprising since 
these elderly hardliners 
seemed to make a comeback 
earlier this year with a cam- 
paign against liberalism pro- 
voked by the winter's student 
demonstrations. 

Since Chairman Mao died 11 
yean ago the reformist move- 
ment has been gradually gath- 
ering strength. With toe elec- 
tion of a new Central Committee 
and Politburean, many of whose 
members are associated with 
the changes orchestrated fay 
Deng since he took power in 
1978, China now seems ready for 
a purposeful and realistic effort 
towards modernisation. 

New freedoms 

Much has already been 
achieved. Freedoms unthink- 
able in Mao's day already exist 
As long ago as 1979 the rural 
communes began to break up, 
free markets were instituted 
and peasants allowed, within 
certain Limits, to grow what they 
liked. The dissolution of toe col- 
lectives and toe new flexibility 
in the countryside led to a huge 
and profitable growth in small 
industry which helped to satisfy 
the ciying needs for even sim- 
ple consumer goods. 

1984 toe leadership turned its 
attention to reforming the ur- 
ban economy, and while these 
changes have ran into sizeable 
problems, they are still at the 
forefront of Chinese policy. On 
top of that, the growing famil- 

iarity among Chinese people 
with concepts such as manage- 
rial independence. Incentives 
for workers, flexible prices and 

even the purchase of shares, 
has begun, if only just, to 
change national attitudes. 

This reform programme now 

seems certain to continue. Pre- 

mier Zhao Ziyang, protege of 
Deng and himself a reformist; 

has been confirmed as party 
general secretary in place of Hu 
Yaobang, also a Deng man but 
forced to resign last January af- 
ter the student demonstrations. 
But Hu kept his place on the 13- 
strong Politburean elected yes- 
terday and toe man often re- 
garded earlier as his heir, Hu 


QUi, was voted onto Chios's rul- 
ing five-man Politburean Stand- 
ing Committee. The new Folit- 
bureau now contains 
experienced and pragmatic pro- 
vincial leaders-This surely con- 
firms the pre-eminence of the 
reformers. The main document 
of toe Congress, party leader 
Zhao's report, affirmed almost 
throughout its 34,000 words the 
need for reform. Ideological 
justification was provided in 
the form of a definition of toe 
country's present policies as 
the "initial stages' of socialism. 
This is to last until at least the 
year 2050. The task for this peri- 
od is seen simply as to become 
more prosperous. 

However toe reformers are. 
unlikely to have a smooth ride. 
The new Politburean Standing 
Committee looks split between 
strong Deng supporters and 
those who like Li Peng, the man 
widely expected to take over 
toe premiership from Zhao next 
year, seem more committed to 
the ideas of central planning. 
Though the elderly conserva- 
tives have retired from their 
formal posts, they will retain 
much of their Influence. The 
question of army leadership, 
still in Deng's hands, will recur 
with increasing pointednes s as 
he grows older. And it is a safe 
bet that in the middle ranks of 
toe party, recruited during the. 
1966-76 Cultural Revolution, 
there are many who do not fa- 
vour the changes. 

Party intervention 

The political reforms Zhao 
proposed will be unpopular to 
implement since they will cut 
back party intervention and 
leave many junior party mem- 
bers without a real role. A pre- 
vious effort to reform toe party) 
by examining individual cre- 
dentials fizzled out completely. 

Perhaps most important is the 
question of whether the new 
leadership can actually Jmple- ' 
ment the programme outlined 
by Zhao. On the economic side, 
many of the measures he dis- 
missed, such as price and bank- 

S E reforms, have already been 
ed and ran Into difficulties. 

inflation has been a serious 

problem this year, causing con- 

siderable discontent Proposals, 
to festal a bankruptcy system to : 
make the economy more effl-1 
clent have not worked well and ' 
did not rate a mention in Zhao's 
report While Peking may now 
have the consensus it needs 
among the leadership for re- 
form, getting it to work effec- 
tively is another matin 1 . 


FOR THE FIRST 11 nufaths of 
Big Bane, London’s securities 
firms had many problems - and 
one very large consolation. In a 
continuous bull market, no one 
was easily able to distinguish 
winners from losers; former 
stockbroking and jobbing firms 
were able to gloss over strategic 
blunders and suppress their la- 
tent management problems. 

Even though their 198B87 
profits were mediocre, toe two 
largest firms to be put back on 
the market since Big Bang; Al- 
exanders lafag »ini Cruick- 
shaitfc and Wood Mackenzie, 
had attracted offers two to three 
Hme8 their original purchase 
prices. A startup firm. Ark Se- 
curities, was sold for£i7m last 
month only a year after its 
launch. 

As City firms look back from 
the perspective of the market 
crash, their well-laid plans for 
the financial services revolu- 
tion do not look as sound as they 
did at their conception. 

In Che three year run-op to Big 
Bang, more than 20 banks ac- 
quired stockbrokers or jobbers 
or both. Most based their moves 
on what became the convention- 
al wisdom, that the following 
five ingredients would be 
needed for success in the new 
world: 

• The capacity to offer both In- 
vestors and companies (for 
whom traditional bank loans 
were becoming less attractive) 
an integrated service covering 
corporate finance advice and 
the issue, distribution, research 
and market-making of securi- 
ties. 

• Pro fe ssional, corporate man- 
agement; the old partners, it 
was assumed, would not be ca- 
pable of introducing the new 
skills, systems and services. 

• S ubstant i al capital TrwfrfTtff 
which could only be provided 
fay a large financial fam ti ttw 

• The opportunity to reap econ- 
omies of scale from belonging to 
one of the handfhl of large fi- 
nancial institu tions which 
would come to dominate foe 
global securities and invest- 
ment Kanin wg - 

• As an a l ternative to size, a 
small, specialist niche such as a 
loyal base of small investors or 
local companies in a provincial 

city. 

A year after Big Bang, all toe 
s ur veys of institutional inves- 
tors and other customers of the 
securities industry, as well as 
marhetsbare figures frag- 
mentary financial results, have 
shown that those who were at 
toe front of the pack before Big 
Bang have moved farther ahead 
now. 

The six clear winners so for 
have been the two leading pre- 
Blg Bang research brokers, 
James Capel and Phillips and 
Drew (both of which have been 
building up large corporate fi- 
nance departments), Hoare Gov- 
ett, (also one of the top five bro- 
kers both for research and 
corporate finance) and the 
firms built around toe three 
leading Jobbers; Wedd Dnxlacb- 
er, Akroyd and Smiihers and 
Smith Brothers. 

k . 

The aix-JhU-tataJmp gponpp. 
Capel, P & D, Hoare Govixt and 
Smith Brothers have, in the 
phrase of the US management 
writers, Peters and Waterman, 
"stuck to their knitting.* Despite 
grafting on a trading or, in 
Smith’s case, a research and 
sales, arm, they have largely 
preserved their methods of 
working with miwinwim inter- 
vention from their new owners. 

The consistent strength of Ca- 
pel’s analysts and s ales m en 
meant that only two fectors 
were necessary for its contin- 
ued dominance as the only ma- 
jor equity broker with no mar- 
ket-making capacity: high 


A year ago, London Stock Exchange firms knew what it would take to 
do well out of Big Bang. Mostly, says Give Wolman, they were wrong 


Pre-Bfi Bang firms 


Proem firm 


Owner 


Pre- Big Bang firms 


Present firm 


Owner 


SEAQ MID-PRICE TRENDS 
SECURITIES FIRMS (21) 


NOVEMBER 19S7 


LEADERS 

Stickers to the tainting 

JamesCapef James Capel 


Phflfips & Drew. 
Mousdale 


Phflfos&Drew 


Hoare Govett Hoare Gcvett 

Smith Brothers Smith New Court 

Integrated investment banks 

S.G.Warburg Warburg Securities 

Akroyd & Smtthers 
Rowe & Pitman 

Mullens 

Bardays merchant Barclays de Zoeta 
banMeZoete Wedd 

& Bevan, 

Wedd Durtacher 


Hongtong& 
Shanghai Bank 
Union Bark of 

Switzerland - 

Security Pacific (US) 
Independent 

S.G.Warfaurg 


Bardays Bank 


Sbnon 4 Coates, Chase Manhattan Chase Manhattan 

Laurie hfilhank Secwities BankfUS) 


Strimgeotr 
Ken? Gee 
Vickers da Costa 


Cftfcnrp Scrimgeour Citicorp (US) 
Vickers 


Inteffratedirnsstment banka " 

Kteinwort Benson Kfefaiworf'&ieveson Kteinwort Benson 
Grieveson Giant Securities.. 

Morgan Grenfell Morgan GrenfBO Morgan GrenfeH 
Pinchin Denny . Securities 
Pember & Boyte 


LAGGARDS 

LAtasse) 


W.GreenweB 

S.Morrtagu 


Quitter Goodson PartoastXttfter 


Shearson Lehman 
Securities 

Graenwell Montagu 
Securities 


Shearson Lehman 
Brothers 

M dand Bank 
Paribas (France) 


RECOVERY STOCKS 

Subsidiaries ot tanking giants 
County bank, County Natwest 

Rafting Newson Securities 

-Smith, 

Bisgood Bishop 


National 

Westminster Bank 


QUESTION MARKS 

Laing & Crufcfcshank Alexanders Laing 
& Crulckshank 

Wood Mackenzie Wood Mackenzie 

Formerly: Mercantile 
House. NowrCrerfit 

Lyonnais (Ranee) 

Formerly: Hffl 

Samuel. Now ? 

DARK HORSES GoUnwSachs 

OaMwanSachs(US) 

Equtty/Qovt Securities 

— Salomon Brothers 

PWbro-Salomon(US) 

(Giles & CressweB) Men'll Lynch 

Merril Lynch(US) 

Nomura 

Nomura Securities 

International 

(Japan) 


Cazenove 


Cazenove 


Independent 


Secrets of success 


enough morale to rebuff the 
ubiquitous headhunters and the 
continued importance of re- 
search to institutional inves- 
tors. 

In the first two months after- 
Big Bang, as investors transact- 
ed more than 60 per cent of 
their bargains on a commis- 
sion-free basis, the second as- 
sumption started to look ques- 
tionable. But after the New 
Year, commission payments re- 
vived. Despite its strategic con- 
servatism, Capel has also be- 
come one of the leaders in 
buying from Investors large 
tranches or portfolios or shares 
wiiH reselling them quickly 
profitably. 

The Phillips and Draw part- 
nership, after hesitating for a 
long time over its Big Bang 
strategy, eventually found a 
powerful owner, the Union 
Rank of Switzerland, with expe- 
rience of integrated investment 
banking. However, after a year 
of hands-off mawagwmv nt, the 
increasingly Interventionist 
stance of UBS, in centralising 

the credit-rating of all PAD 
customers with its own, for ex- 
ample, may start to arouse re- 
sentment. 

' wify dlid Capel, P & D and 
Hoare Govett have to sell them- 
selves to foreign banks? All 
three pay lip service to toe po- 
tential for syne r gy with their 
owners. This will be achieved, 
they say, through that fell-back 
justification for so many merg- 
ers, cross-selling, mainly in re- 
mote corners of the globe. But 
so for the only tangible benefit 
from their owners has been in- 
jections of capitaL 

Yet if all they needed was 
capital, they could have fol- 
lowed the example of Smith 
Brothers and the advice they 
must have given to hundreds of 


corporate clients and floated 
themselves on the stock market 
Phillips and Draw came closest 
to doing so. P ro spect u ses were 
printed and profit forecasta 
prepared. But the scrutiny to 
which public companies are 
subjected was in the end con- 
sidered too fearsome. James Ca- 
pel, howeve r, is now discussing 
ft* possibility of a nf 


controls based on predeter- 
mined trading i»n»n* used fay 
most of its competitors. But its 
independent attract- 

ed several top research ana- 
lysts. Like the other jobbing 
firms, Smith, with its efficient 
back office and stock borrowing 
experience, has profited from 
what has become an important 
feature in toe last six months. 



Question marks 
hangover 

those firms 
which are 
being buQt up 
from scratch 


nority of its shares on the Stock 

Rrph im g o - < - gain 

; «K l, i r In 

The one' leading firm which 
rebuffed all purchasers was Ca- 
zenove and Co, still a partner- 
ship, which remains toe l mauling 
UK corporate broker. But its 
continued success depends on 
toe outcome of the official in- 
vestigations into two controver- 
sial takeover battles in which it 
was involved in 1906, the Guin- 
ness bid for Distillers and Turn- 
er and Newall'k bid for AE. 

Smith’s success formula has 
been even more cons erva t i ve 
than the other three. It still es- 
chews the risk management. 


the backlog of unsettled bar- 



the other two successful job- 
bing have been brought 
into integrated securities and 
investment balding o pera tions, 
managed by the two UK firms 
considered to have the best 
chances of becoming world 
players, S.G. Warburg and Bart 
clays. Their achievements in 
managing such ambitious tran- 
sitions have been much greater 
than those of the other four win- 
tiers* 

The Big Bang laggards and 
losers have been, as predicted, 
those middle-rank firms which 
were drifting into decline well 


before 3987 because of their 
slowness to adjust. Their prob- 
lems have been compounded by 
toe shifting strategies and clum- 
py handling of their owners. 

L. Mesael, a traditional blue- 
blooded partnership, has been 
jolted ruddy into toe new world 
by Shearson Lehman, a partner 
with which it was uniquely ill- 
matched. Despite its Ion g expe- 
rience of acquiring and inte- 
grating securities firms in toe 
US, Shearson seriously under- 
estimated the competitiveness 
of the UK market It expanded 
staff too rapidly, then, when its 
mar ket share foiled to pick up, 
cut back and introduced a 
fell-blooded US-sfyle sales- 
driven philosophy relying on a 
team of generalist salesmen 
paid entirely on commission. In 
September, Shearson became 
the first Stock Exchange firm to 
announce large-scale redun- 
dancies with the loss of 150 jobs. 

By contrast, ParibasfQnDter 
Goodison. after changing par- 
ents In mid-stream, has been al- 
lowed to decline more gently as 
a result of defections of analysts 
and. salesmen, rabnffe to its 
share-shop initiatives (which It 
now appears to have overcome) 

rm 

has beat W. GreenwelL a lead- 
ing research firm, with an 
old-fashioned lack of emphasis 
on selling. It was carved up 
three ways fay its new owner. 
Midland Bank, and then forced 
to withdraw from equity mar- 
ket-making only six months af- 
ter Big Bang as a result of a 
poorly rationalised shift in 
strategy by its demoralised par- 
ent The firm then suffered 
more than 23 resignations of se- 
nior staff 

In the middle are those firms 
which were unshed together 
and shaken op by their parents. 


creating unrest and resign*, 
lions, ' but which have subse- 
quently recovered. In this cate- 
gory fell the firms acquired fay 
the three largest banks to enter 
the UK securities market, Citi- • 
corp, Chase Manhattan and Na- 
tional Westminster. 

NatWest considered it was too 
risky to invest as heavily as Bar- 
clays in acquiring securities 
firms. It bought a middle-n&k 
broker and a jobbing firm with 
strengths in different sector* of 
the market and then fad to fiu 
in toe gaps through extensive 
recruiting which left its man- 
a ge ment with insufficient fiww. 
to handle the other problems of 

integ ration. 

Chase Manhattan took on the 
challenge of putting together 
two broking firms and imposing 
tough budgetary controls and 
reporting procedures. It has re- 
cently recovered from a slump 
in morale and defections during 
last winter. 

Last year, Citicorp began in- 
troducing s imil a r centralised 
controls and standards, in line 
with its general management 
philosophy, to the two broking 
firms it acquired, Scriiageour 
ifi-mp Gee, one of tbe top re- 
search brokers, and Vickers da 
Costa. But after it, too, sufifered 
defections, the policy was put 
into reverse and three of the 
managers it sent across from 
the US were recalled. Since 
then it has become a major mar- 
ket-maker and its damaged re- 
search reputation is being re- 
built 

Tbe other two firms in the re- 
covery category are Klein wort 
Grieveson, whose progress, par- 
ticularly in international equi- 
ties, was marred during tbe win- 
ter by a breakdown of controls 
which led to chaos and substan- 
tial losses in its back office 
operations, and Morgan Gren- 
fell Securities. Morgan erred in 
foiling to buy an equity broking 
firm to link up with Pinchin' 
Denny, the jobber it acquired. 
Serious recruitment to build up 
a broking arm began only a few 
months Before Big Bang, and 
then suffered from the fell-out 
of to** G uinn ess affair and. the 
insider-dealing prosecution of 
its joint managing director Mr 
Geoffrey Collier. 

The biggest question marks 
t»a^g over toe two firms chang- 
ing parents. Wood Martatwin 
and Alexanders Laing and 
Cnxickshank, and those firms 
being built up from scratch fay 
the large US and Japanese se- 
curities houses. Nomura has 
now . replaced Salomon 
Brothers, Goldman Sachs and 
Merrill lynch as the firm which 
poses the most ominous over- 
seas threat. Although No mu ra 
has a massive capital base and 
domestic clientele of investors, 
the advantages of size in toe 
new City have been exagger- 
ated. Witness the number of 
banks, such as NatWest and Hill 
Samuel, which have felled so 
for to reap the much-acclaimed 
benefits of integrating their cor- 
porate finance and other bank- 
ing activities with their newly- 
acquired broking and market- 
making arms. 

None of toe five Ingredients 
Of success* 1 cratlined.above have 
thus e n raged as important fec- 
tors riiaKwgwiviifag the leaders 
from tbe stragglers and those 
doomed to disappear. The only 
proposition beyond doubt is 
that investment in qualify, in 
firms with strong professional 
managements already in place, 
has paid off! 

A series <of articles starting on the 
Management Page tomorrow toSI 
examine how the leaders and lag- 
gards have fared in particular ar- 
eas cf management actwitg: per- 
sonnel, planning, marketing and 
financial and other control 
systems. 


Hoffman takes 
off 

Hoffman, current 
dent of the Institution of Pro- 
duction Engineers, and a senior 
figure in British enjctoeerimt at 
48, is nothing if not catholic in 
his business ventures. 

In his time he has been with 
Rolls Boyce, c hairm an of Per- 
kins (diesels), part of the rescue 
tram for Massey Ferguson (trac- 
tors), and latterly chief execu- 
tive of Babcock International 
(pow er st ations) until its merger 
wifeFKL 

Now Hof&nan’s career might 
be said to be taking off 

He is to be the new chief exec- 
utive of Airship Industries 
which recently won a $l70m 
contract to develop an airship 
for the US Navy - the largest 
contract ever placed in the his- 
tory of airshipa 

The US wants a big airship 
designed to Ugh technology 
specifications to act as a semi- 
permanent radar station, hover- 
ing for days on end high above 
its battle fleets. 

Such a craft would, if avail- 
able, be very handy above the 
Persian Golf at the present 
time. 

The Anstralian-based entre- 
preneur and yachtsman, Alan 
Bond, who is toe principal 
shareholder of Airship Indus- 
tries, nursed toe company along 
with small passenger-carrying 


«r 


few 

raw 


Men and Matters 


airships - they have crnlse 
over London for the last two 
summers - while pitching for 
the unique us development 
contract. 

With Airship Industries now 
playing in an altogether bigger 
industrial league, it badly 
needs a chief executive with 
Hof&nan’s track record in pro- 
duction engineering anH man- 
agement 

Alan Birchmore. an execu tiv e 
director of Bond Corporation 
Holdings, who has been running 
Airship Industries in Britain, 
will remain on the board, but 
will be spending more time 
managing Bond’s other Europe- 
an Interests. 


Porter in post 

What John Gardiner, chief ex- 
ecutive of toe engineering busi- 
ness, toe Laird Group, calls 'a 
well planned change-sees some 
musical chairs in the top man- 
agement 

Erik Porter, aged 48, has been 
appointed managing director 
and will be concerned with toe 
day-to-day management of the 
group, while Gardiner, aged 51, 
assumes a more strategic role 
fay combining the jobs of chair- 
man and chief executive. 

Sir Ian Morrow, chairman 
since 1975, is retiring. Ian Ar- 
nett, aged 44, an executive in 
the group, becomes finance di- 
rector in succession to Porter. 

Laird, which used to be syn- 
onymous in investors's minds 
with utai^iiphniMitnf, trains, 
and buses, has narrowed its 
range of interests out of all rec- 
ognition. 21s business is now in 
equal parts in Britain, Europe, 
and the US, and one-third of its 
£380m annual sales Is coming 
from making car body seals. 

Porter, who joined the group 
In 1973, and became finance di- 
rector four years later, went to 
school in Australia, and later 
Aberdeen. He became a Scot- 1 


tish chartered accountant His 
first years with the Laird group 
were spent in management at 
the then subsidiary, Scottish 
Aviation. 

He is certain to continue 
Laird’s momentum away from 
traditional engineering and in- 
to growth man u fa cturing areas 
such as the automotive seals, 
plastics, and printing and pack- 
aging. 


Trying time 


Hungary’s outspoken new 
Prime Minister, . Karofy Grosz, 
was given a Western style wel- 
come by local re p or ter s on his 
return from a recent visit to 
West Germany. A Radio Buda- 
pest reporter asked Grosz 
whether he would have time, 
despite his gruelling schedule, 
to try out the new BMW he had 
been given in Munich. 

Grosz, who recently unveiled 
a tough economic austerity pro- 
gramme, laughed and said he 
could not try it out because he 
was on his way to parliament 
and afterwards would start 
reading up for his negotiations 
in Moscow. Then there was a 
meeting on the economic situa- 
tion and Co m econ, after which 
he was off to Moscow. 

Undaunted, toe reporter 
urged the Prime Minister to say 
something about. toe BMW be- 
cause people were interested in 
what woud bappen to it 

Grosz: ’As to what happens to 
the BMW,. I don’t even under- 
stand tbe question.' 

Reporter ’Will you ever find 
time to sit in it? 

Gross: 'Well, I don’t have the 
time. But 1 would like to say the 
following. First! am absolutely 
certain I will not take it home. 
Secondly, I am not going to take 
it to the second-hand market to 
sell it More than likely, I will 
retire the service car which is 
currently at my disposal and 
will take over the BMW - sit in 


it It must still be decided 
whether it should have toe 
scheduled private registration 
number or a Government regis- 
tration. But that Is no longer my 
business. It’s up to tbe Govern- 
ment What is absolutely cer- 
tain is ii»i is th« car I am 
going to use, that is, I shall use 
it for work.’ 


Whittle’s honour 

Sir Frank Whittle, pioneer of 
the aircraft jet engine, who is 
currently visiting Britain from 
his home in the United States, 
will attend the unveiling next 
week of a bust of himself com- 
missioned by the Institution of 
Mechanical Engineers. 

The bustsculpted by Irena 
Sedlecka, who came to Britain 
from Czechoslovakia in 1906, 
will be unveiled at a ceremony 
on November 12 fay Sir Francis 
Tombs,chairman of Bolls- 
Boyce. 

Tbe in sti t u t i o n which made 
Whittle#!, a honorary fellow in 
I**, is to honour him also fay 
naming an ante-room at its Lon- 
don. headquarters tbe Whittle 
Boom4n which items associated' 
with his career and the develop- 
ment of the jet engine will jbe 
featured. 


Tasteful 

My man In Berlin was tram- 
pled the other evening by East 
German officials rushing to- 
wards a mouth-watering buffet 
set np for a reception in the 
West German mission in East 
Berlin. In an exercise in 
one-u p mans h ip, the mission 
had cleverly laid on delicacies 
which are rarely if ever seen in 

East Geramny even by middle- 

rankingparfy ftmetionaries.- - 
-One East German balanced 
four bananas on his plate while 
others dug into smoked salmon 
and ed St ra wbe r ries were an- 
other popular item along with 
fresh pineapple aid grapes. 
One exotic fruit caused some 

puzzlement until an Ger- 

man positively identified it as a 
kiwL 

Unlike postwar West German 
receptions, however, where 
_ arts frequently shovelled 
goodies into plastic bap, the 
East Germans strictly .avoided 
taking home any of the spoils. 


Observer 






Steel 


.metal, water resistant 30 m. 

FERBXN 


3% awnue VkurAugo - feris «01 8888 

a rue Regnle * Pmrfs 42603283 
MRS -OWWCS. 


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l ; inahciaI1‘inioTucMla\ November 3 1987 


27 


Although tfie INF treaty promises disarmament, Europe’s rem ai n ing 
nuclear forces will be strengthened. David Buchan reports 

Respinning the arms web 




ft 9 

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USE THE Roinvn god Janus, 
western nuclear arms planners 
face two ways - ready to usher 
oat one set of ground-based 
cruise and Pershing miss iles 
o nly to beckon in a moder nised 
array of shorter range weapon- 
ry, and possibly some new mis, 

sues launchable from the skies 

above Europe and the 'm»a s 

around it 

Western public opinion may 
mil be dismayed by the spectre 
of nuclear rearmament see ming 
to threaten the gains of the In- 
termediate Nuclear Forces 
ONF) treaty, soon to be signed 
with Moscow. The Kremlin, for 
its part, will almost certainly 
ay 'circumvention' and charge 
the west with breaking the spir- 
it, if not the letter; erf' the INF 
paeL 

But Nato military co mmand - 
ers - in particular General John 
Gatvin, the supreme allied com- 
mander in Europe and his pre- 
decessor, General Bernard Rog- 
ers - believe selective nuclear 
reinforcement Is vital to main- 
taining Nate’s deterrent strate- 
gy of flexible response. This re- 
quires the west to be able to 
match any Warsaw Pact threat 
at an appropriate, and thus 
credible, leveL 

Caught somewhere between 
the nuclear allergy of many of 
their citizens and the nuclear 
bent of their commanders are 
Nato governments. They have 
always been secretive on nuele- 


Senate. But once signed, Euro- 
pean political support for fur- 
ther INF deployments is likely 
to crnmhle. Those countries * 
Belgium, the • Netherlands, 
Britain - due to deploy farther 
missiles may not do so. while 
West Germany and Italy may 
start rejecting the fall comple- 
ment they already have. Thus, 
as' Mr Henry Kissinger has 
warned, “non-ratification (of an 
INF pact by the Senate) fa not 
an option*. 

In fact, deficiencies in tacti- 
cal nuclear weapons - supposed 
to link conventional forces with 
US strategic (inter-continental) 
missiles in a web of 

deterrence - were evident sev- 
eral years ago. In 1983 the nu- 
clear planning group, meeting 
at Montebello in Quebec, com- 


vin has this year re-endorsed, 
new systems: 

• an improved and longer range 
version of the existing 110 km- 
range Lance missile. US troops 
in Europe now hold 106 of these 
and the allies X\ Design and de- 
velopment of the new Lance is 

underway in the US. 

• improved range and accuracy 
for the roughly L000 nuclear ar- 
tillery shells which the US has. 
provided for its farces in Eu- 
rope and those of its allies. The 
US has already re-equipped its 
forces with new 8 inch (203mm) 
shells, but a 6 Inch (155mm) 
shell is still under develop- 
ment 

• a "stand-off nuclear missile 
that can be fired from an air- 
craft well away from a target 
like a mfai-enuse missile. The 


Nuclear-capable launchers 
cm Nato's central front 


SoukkSSS 

| Belgium | 

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Qaraany 

UK 

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184 

170 

64 

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294 

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Artiflery 








. \ ~ than sow on.the future of Nato 


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„ •: whose range of under 5,000 fans 
" V means that they cannot reach 
" from one superpower to anoth- 

Short range 

missiles'* 

5 

6 

26 

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have been drafted, options dis- 
cussed. But only In Washington 
have they had anything like a 
public airing; in Europe, gov- 
ernments have kept as sOent as 
their generally less demanding 
legislatures allow. 

However, the imminence of 
an INF treaty is now farcing ur- 
gent consideration of the post- 
INF nuclear map of Europe. 
The 13 Nato defence ministers 
that make up the Nuclear Plan- 
ning Group meet today in Mon- 
terey, California to start sketch- 
ing out decisions **»<»* wnrf be 
taken in 1988. 

For the nuclear planners, the 
timecloek will begin running 
the -minute an INF pact is 
signed. In theory, Nato has 
agreed to continue towards its 
goal of 972 cruises and. Persh- 
ings until the pact is not only 
signed but -ratified by the US 


mitted itself to reducing -the 
number of tactical weapons in 
Europe, and redistributing and 
modernising the remainder. 

Success has been mixed. Nato 
has pulled 2,400 weapons out of 
Europe (leaving 4,600), and, 
rightly, made some propaganda 
nicy of it because the Soviet 
union has increased its compa- 
rable weapons in the meantime. 
But what went were mainly dan- 
gerous and/or ineffective weap- 
ons like atomic Nike- 

Hercnles air-burst weapons and 
ancient Honest John rockets. 
Nato commanders have re- 
quested that remaining weap- 
ons be spread more evenly, with 
fewer in central Europe and 
more on the flanks. But Nordic 
refasal and Turkish reluctance 
have stymied that plan. 

Finally, General Rogers pro- 
posed in 1965, and General Gal- 


US is developing such a missile. 
In Europe only France is in- 
troducing .something s imilar , 
the ASMP missile, though in Ju- 
ly tiie US and six European 
countries' including the UK 
started development of a stand- 
off weapon that could carry -a 
nuclear charge. 

This modernisation is 
slow. For the first time since the 
first tactical nuclear weapon 
Can artillery shell) was de- 
ployed in Europe in 1968,. the 
Europeans are being asked for 
a serious cash contribution to 
tactical nuclear re-equipment 
Bat spending money means in- 
forming parliaments - hence a 
double reason fa r gove rnmental 
procrastination. Sensitivities 
are, however, not confined to 
Europe: Congress, which does 
not want to pay for weapons the- 
Europeans will not allow to be 


deployed, has restricted pro- 
duction of new 8 inch shells to 
925, halted production of nen 
tron artillery fh»iin after 40 
were made in the early 1960s, 
and ordered a purely conven- 
tional role for the new Joint 
Tactical Missile System 
(JTACMS). 

None of these systems are 
considered a substitute for lon- 
ger range INF weaponry. In- 
deed the planning assumption 
in 19 89 was that Pershings »nd 
cruises would stay. So nuclear 
planners are now talking of oth- 
er "compensatory measures* or 

'adjustments' for the disappear- 
ance of INF. Options focus on 
relatively s p ee dy r eassignment 
of existing US forces rather 

than H ^ii^ n pigi ming Creation 

of new ones. They seek to ex- 
ploit the fact that the INF draft 
treaty covers only ground-based 
systems. They range from baa- 
ing cruise-armed B-52 bombers 
in Europe (most unlikely) to 
basing more F-lll aircraft in 
Europe and assigning some sub- 
marine launched cruise mis- 
siles to Gen Galvin. 

All the options have dear 
drawbacks. Manned aircraft are 
increasingly vulnerable to ev- 
er-better Soviet air defence. Us- 
ing sea-launched cruise mis- 
siles as tactical and strategic 
weapons might be unwise; 
Moscow would never be able to 
tell whether the cruise rising 
out of the sea was an intermedi- 
ate warning shot or the start of 
the final US onslaught and 
might miscalculate accordingly. 

But leaving Nato, post-INF, 
predominantly equipped with 
short range nuclear weaponry 
.and in that outmatched numer- 
ically by the Warsaw Pact - 
might be worse. Certainly, 
Nato’s main frontline state, 
West Germany, feels that Mr 
Lothar RueU, the deputy Ger- 
man defence minister, recently 
pointed out the irony that Nato 
forces in Europe might soon 
have conventional weapons of 
longer range than their nuclear 
arms and stressed, *19810 must 
not fall back on nuclear battle- 
field support" as a consequence 
of controlling longer range nu- 
clear arms. 

The first nuclear weapon ever 
used in Europe would, after all, 
most likely be a battlefield 
shell However clear Nato 
guidelines for political author- 
isation, "the tradition of a field 
commander putting .his blind 
eye to the telescope," as Dr 
David Owen has pointed out, 
•did not die with Lord Nelson". 


THIS WEEK the Soviet Union 
celebrates the 70th anniversary 
of the Bolshevik revolution. It 
does so in the throes, or per- 
haps only at the beginning, of a 
new "revolution” - or so its lead- 
ers have proclaimed. 

Of course this will be a revo- 
lution with a difference; with- 
out bombs or bullets, Mr Gor- 
bachev says; a revolution 
deliberately planned and engi- 
neered from the top. 

That is, aamming that thing s 
do not get out of control When 
one thinks about it, revolutions 
in the first stages are always en- 
gineered by part of the existing 
ru l i ng group against another 
part In order to win their point 
they open up the political sys- 
tem and call in new forces from 
outside. But the outside forces 
turn out to have a different 
agenda of their own. Once mobi- 
lised. they prove difficult to de- 
mobilise - and that is when 
things get really interesting. 

Clearly there is a risk - or a 
chance - that that will happen 
again in the Soviet empire. Mr 
Gorbachev’s purpose in pro- 
claiming glasnost is. presum- 
ably, to call in ontside forces, 
which until now had little or no 
say in the Soviet -political pro- 
cess, in order to strengthen him- 
self and his allies in their battle 
against bureaucratic inertia 
and for a more efficient, decen- 
tralised economic system. 

The members of the old lead- 
ership and the old elite have, 
for the most part, a vested inter- 
est in the continuance of the old 
system. So Mr Gorbachev needs 
to bring on to the stage a new 
elite, composed of 'intellectu- 
als" in the broad sense - edu- 
cated people with an interest in 
new ideas, able young people 
qualified for greater responsi- 
bilities than the old system al- 
lowed them. They are his natu- 
ral constituency, his allies in 
the struggle for perestroika. 

But this new elite, or parts of 
it, may turn out to have an agen- 
da of their own going beyond Mr 
Gorbachev’s. Freedom is a noto- 
riously difficult commodity to 
ration, and freedom of speech, 
if it means anything has to 
mean freedom to say what the 
Government does not want to 
hear as well as what it does. Al- 
ready there are groups and in- 
dividuals in Moscow saying 
things which clearly go too far 
for some of Mr Gorbachev’s Po- 
litburo colleagues, though be 
himself has yet to give any sign 
of being ruffled. 

But let us suppose, for a mo- 
ment, that Mr Gorbachev's “rev- 
olution" stays approximately on 
track. How should we under- 

stand its relationship to that 
other revolution, 70 years ago? 

Mr Gorbachev himself, in his 

new book, presents it as simply 

another stage in the same pro- 

cess - standing in the same rela- 
tion to 1917 as 1830 and 1848 did 
to 1789 in France, or 1688 and 

1832 to "the Cromwellian Revo- 

lution of 1649" in Britain: sup- 
plementary revolutions were 



FOREIGN AFFAIRS 


A captivating 
but empty 
anniversary 


needed to finish the job "before 
power was finally handed to a 
new class.” (He confases the is- 
sue by adding 1871 to the list - 
the Paris Canunnng which at 
the time was by Marx not 

as a completion of the "bour- 
geois" revolution but as a proto- 
type of the proletarian one. Bnt 
probably the reference intend- 
ed is to 1870- the fall of the Sec- 
ond Empire and proclamation 
of the Third Republic.) 

These analogies imply. that 
the Stalin and Brezhnev eras 
should be seen as temporary 
setbacks for socialism, just as 
the Restoration, July Monarchy 
and Second Empire In France 
or the despotism of James H 


finds himself obliged to do 
much of Lenin’s work over 
again. 

Among the intellectuals who 
support him there are certainly 
some who see things like that 
Two months ago in Moscow I 
was told, by a prominent figure 
in one of the influential foreign 
policy research Institutes, that 
perestroika could succeed be- 
cause it had been done before - 
after 1917, when a mere 250,000 
Bolsheviks galvanised the en- 
tire nation and won the civil 
war, in spite of foreign interven- 
tion on the side of the counter- 
revolutionaries. Even if the 
number of convinced partisans 
of perestroika were similarly 


The 1917 model may not apply 
to Mr Gorbachev’s Russia, 
says Edward Mortimer 


and the corrupt oligarchy of 
pre-Reform Bill Britain im- 
peded the cause of "bourgeois' 
democracy. 

Yet Stalin himself used a sim- 
ilar argument to justify his tyr- 
anny; the victory of the working 
class in 1917 was not complete 
and final; the class struggle was 
still in progre ss , and the further 
the revolution went the more in- 
tense it became, with the bour- 
geoisie in its death throes find- 
ing allies and agents even 
within the Communist party and 
among the Old Bolsheviks them- 
selves. 

Now, it seems, it must have 
been Stalin who was the unwit- 

ting agent of the bourgeoisie, 
helping It to slow down the 

inarch of socialism and restor- 

ing at least some aspects of the 
old regime. And it is Mr Gor- 

bachev, of course, who emerges 
as the true heir to Lenin. In- 

deed, flianbt to the backsliding 
of the last 50 or 60 years, he 


small, they could galvanise the 
nation again so tong as their 
convictions and political skills 
were great enough. It would 
come naturally to them precise- 
ly because the model of 1917 
was constantly before their 
eyes. Such an effort was "In the 
genetic programme of the Par- 
ly-' 

Yet when I asked Mikhail Pol- 
toranin, editor of Moskovskaya 
Pravda - a man with a party em- 
blem in his lapel and a fine pho- 
tograph of Lenin reading page 
proofa over his desk - what he 
was planning in the way of anni- 
versary celebrations, be looked 
almost puzzled by the question. 
He did not seem to be able to 

see wbat 1917 had to do with 

Moscow’s current problems. I 

had to suggest the above analo- 

gy to him, and he assented only 
grudgingly. 

People were tired of anniver- 
saries and holidays, he said. 


Probably the paper would just 
give 'a history of Moscow be- 
tween the past and the future - 
not starting from 1917 but long 
before." It was artiilcial.he sug- 
gested. to divide history into be- 
fore and after: “we have to fol- 
low the histoiy of the 
motherland in all its connec- 
tions." What he wanted to talk 
about was the appalling ineffi- 
ciency of the Soviet economy to- 
day and ways of doing some- 
thing about it 

Perhaps significantly, Mr Pol- 
toranin is a protege of the 
Moscow party leader Boris Yefc 
sin, whose reformist zeal has 
led him into open conflict with 
more cautious politburo col- 
leagues and whose fature is 
now in the balance. 

Yet his remark has left me 
wondering how seriously to 
take the official claim about go- 
ing back to Lenin and the origi- 
nal principles of 1917. Of course 
it is not only official It is en- 
dorsed, in a way, by expert opin- 
ion In the west Robert Legvold 
of Columbia University, for in- 
stance, warns us that what is not 
changing is the basic character 
of the Soviet political system. It 
would be quite illusory, he says, 
to suppose that Russia could ev- 
er adopt western-style liberal 
democracy, because the abiding 
Russian fear Is of the centre los- 
ing control, whereas the abid- 
ing American fear is of exces- 
sive central authority. Thus Mr 
Gorbachev, by undoing Stalin- 
ism, is simply seeking to get 
back to 'efficient rather than in- 
trusive central direction”, the 
former being identified with 
Leninism. 

No doubt But surely we 
should beware of analyses that 
appear to rest on an immutable 
definition of national character. 
Perhaps it is true that the US, a 
state only 200 years old, has 
been infused with liberalism 
from birth. But other western 
societies - those of Europe, no- 
tably - have arrived at liberal- 
ism only through centuries of 
social and political change; and 
most anniyira see the rise of an 
educated elite, whore support 
is required by the state in its 
battle against feudal vested in- 
terests, as crucial to this pro- 
cess. 

The Soviet Union today is not 
the Russia of 1917,- when the 
vast majority of the population 
was composed of illiterate peas- 
ants. Two thirds of Soviet citi- 
zens now live in cities, and a 
similar proportion have been 
educated to secondary level or 
higher. The need to enlist the 
active Involvement of the intel- 

ligentsia in the country’s eco- 
nomic development has been 
clearly understood by the lead- 

ership. Bnt it is not at all clear 
why a return to the brilliantly 

improvised synthesis of Russian 
authoritarian tradition and 
Marxist utopian promise, which 

served Lenin so well in 1917, 

should be the right recipe for 

doing it 









J. 







Employee riisre 

ownership 

From Mr Bryan Gould . , 
Opposition Spokesman Jar Trade 
aka Industry. 

Sir, I am reconciled to the mis- 
representation of my views, ei- 
ther deliberately or through in- 
competence, by my political 
opponents and by writers for 
lesser journals than your own. 
It is disappointing, however, 
that Michael Prowse (October 
29) should choose to write about 
my views on share ownership 
without apparently being famil- 
iar with what I have saiiT and 
written on the subject 
I have always made it dear 
that the form of share owner- 
ship which I favour is through 
employee . share ownership 
schemes, in which the shares 
are collectively held and are 
not traded in the stock market 
It would provide an additional 
form of social ownership - if you 
like, a popular socialism - and 
would nave nothing in common 
with the so-called popular capi- 
talism which recent events have 
shown to be so gravely flawed. 

Bryan Gould, . 

House qf Commons, SW1. - 


An equal and 
efficient society 

From the General Secretary, 
Fabian Society. 

Sir, It is bad enough having ev- 
ery ultra-left group cla im i n g 
that the turmoil in the financial 


IN 


markets will force Labour to re- 
turn to command socia lism , 
without Financial Times writ- 
ers joining the fray. Michael 
Prowse (October 29) suggests 
that Labour must choose be- 
tween efficiency and equality, 
and reject the private sector as 
an agent of socialism. 

The early socialists - quite 
rightly in my view - saw a more 
equal society as one which 
would also be more efficient. 
With ownership of capital in the 
hands of individuals, there 
were real impediments to mod- 
ernisation. It required national- 
isation to establish efficient in- 
dustries in sectors such as 
electricity, gas, coal, steel and 
rail. 

In the 1960s and 1970s, Labour 
continued to identify moderni- 
sation with Morri soman nation- 
alisation, allowing efficiency to 
be hijacked by the Bigh t In the 
1980s, the Left has rediscovered 
the virtues of markets, and seen 
the wisdom of using their ad- 
vantages to the benefit of work- 
ing people while controlling the 
excesses which unregulated 
competition creates. ■ 

But using markets to achieve 
socially desirable ai ms does not 
necessarily mean greater in- 
equality - even though monetary 
incentives are an essential cor- 
ollary. Market-based incentives, 
could quite conceivably merely 
alter who gets more, rather titan, 
increasing the "more*. And m. 
any case, the taxation system 


Letters to the Editor 


can be used as a correcti v e if 
inequality grows. - 

If Labour has a problem, it is 
not this false dichotomy • be- 
tween equality and efficiency. 
It is in demonstrating that so- 
cialist. policies can Increase 
both equality and efficiency - as 
they palpably did hi the post- 
war period. Under the new 
leadership (which is much more 
than just Bryan Gould), -and 
with the commitment to a fun- 
damental policy review, I am 
convinced that it can - and will - 
be done. 

John Wlllman . . 

12 Dartmouth Street, SW1 

Defining popular 
capitalism 

From the Executive Director, 

Sir, MichaeFVrowse rarely re- 
strains himself from ta kin g a 
swipe, directly or indirectly, at 
"popular capitalism". His latest 
offering (A crisis, fox Gottidism, 
October 29) is a fairly typical 
specimen. Tt-will be touch h 8 ^ 

i der to preach the virtues of pop- 
ular capitalism,' he writes "in 
the wake of the BP affair." : 

But this contention assumes a 
definition of "popular capital- 
ism* which will scarcely pass 
muster. For what the BP debar, 
de totpedoes is not- 'popular 
capitalism* in any of Its serious, 
substantial and sustainable 
forms. The only form of it that 
has been discredited is tire al- 
most ludicrously marginal one 
of sweet-talking the public (Sid 
and Doris?) into making penny 
packet capital gains by slagging 
low priced privatisation issues 
during a bull market. But if that 
is the "popular capitalism" 
which Michael Prowse has in 
mind, he has perpetrated 
(whether innocently or other- 
wise) one of a straw man on his 
opponents’ behalf and then, 
surprise surprise, its demoli- 
tion. 

. Serious, substantial and sus- 
tainable forms of "popular capj-; 
talismT are a1,nn « t bound to be. 
embodied in employee owner-; 
ship- For in all, or almost all,; 
other forms both the voice and! 
the stake which (ordinary) peo- 
ple enjoy as "popular capital-' 
fats' can scarcely be other than' 
mar ginal. But it would be ab-.' 
sura to argue that employee) 
ownership of the serious, sub-( 
xtantfal and sustainable kindi 
has been significantly under- 
mined by the recent behaviour, 
of the stock market For exann 
pie, the 30,000 odd partners oft 
the John Lewis Partnership, in 
their capacity as employee own- 
ers of that business - and thus in 
their capacity as popular capi- 
talists - can afford, unlike the, 
underwriters, to take a rather; 
relaxed view of the BP affair, Ofj 
course, i£ because of the col-, 
lapse of stock market prices, the) 
level of national economic ac- 


tivity declines, then their 1968 
partners’ bonuses may be small- 
er than they would otherwise 
have been. Bnt in that respect 
they will be no worse off than 
the rest of us. 

John Lewis, fa no doubt, some- 
thing of a special case among 
employee-owned firms ter virtue 
of the fact that the business fa' 
owned by the partners not as in- 
dividuals but through an em- 
ployee trust But where, as for 
example in the Baxi Partner- 
ship, employees also own 
shares as individuals, it is only 
a convention of the share valua- 
tion department of the Inland 
Revenue - and not the necessity 
of iron laws - which currently 
requires that the valne of these 
shares should be partly linked 
to price earnings ratios on the 
stock market In many ways it 
would be both more logical and 
more sensible if they were val- 
ued simply on the basis of com- 
pany performance. Should that 
reform be achieved, then B aid’s 
partners' will be as well placed 
as their John Lewis conterparts 
to shrug off sudden fluctuations 
in the prices of publicly traded 
shares. 

What finally seems quite un- 
acceptable about the Michael 
Prowse approach fa the implicit 
suggestion that employees, the 
public, Bryan Gould and others 
must choose between conven- 
tional capitalism on the one 
hand and old style (state owner- 
ship) socialism on the other. On- 
ly knaves and fools he implies, 
will bother themselves to look 
for something - say, a genuine 
and sustainable "popular capi- 
talism” embodied in employee 
ownership - which is potentially 
an Improvement on. both. Such 
an approach can be sustained 
only a dogma. It seems to fly in 
the face of the whole history of 
the gradual piecemeal im- 
provement of our institutions. 
Robert Oakeshott, 

9 Poland Street, wl. 

International 

shares 

From Mr John M Hermesty 
Sir, Closer analysis of the per- 
formance of international 
shares shows that the off the 
caff reactions of some invest- 
ment analysts are mistaken. In- 
ternational equities have per- 
formed at least as well in the 
past two weeks as the rest of the 
UK market 

For example, of the 10 compa- 
nies with major ADR pro-' 
grammes named in an article in : 
the Financial Times (October.' 
KB, five have outperformed the 
FT-SE 100 index. These are 
Beecham. BP, Glaxo, Hanson 
TTust ana ShelL 

A total of 33 companies in the 
FT-SE 100 index have either 
made an international share of- 
fering or an international equi- 
ty linked issue in the past 12 
months, or are among the 10 


companies with the largest 
ADR programmes. Of these 
companies, 16 have outperform- 
ed the FT-SE 100 index over the 
past two weeks. 

. The factors underlying the 
relative performance of individ- 
ual shares over the past two 
weeks have much more to do 
with company-specific news, 
preference for individual sec- 
tors, and perceived dollar expo- 
sure; than who or where the 
shareholders are. 

For example, many of the 
high street retailers, who are 
performing relatively , strongly, 
have recently taken active steps 
to increase their international 
ownership Argyll, ASDA, Bur- 
ton, Dee, Dixons, Storehouse 
and Tesco have all made equity 
linked offerings in the past 12 
months, all sold in the interna- 
tional market During the last 
two tumultous weeks there has 
been virtually no selling of con- 
vertible bonds by continental 
investors. On the contrary, with 
this loyal investor base, the 
market in equity linked issues 

5 UK companies has been one 
the best performing equity 
sectors In the world over that 
period. 

It seems to us that the argu- 
ments in favour of UK compa- 
nies making their investor bas- 
es more international are as 
strong today as they were two 
weeks ago. 
jMHeunessy, 

Credit Suisse First Boston, 

2A Great TUcJtfeld Street, W10 

Holorway 

management 

From Mr John WeetmaA 
Sir, Michael Woodward Getters, 
October 3Q) concludes that the 
bulk?of the delays on the M25 
are the result of bad manage- 
ment In doing this he fa assum- 
ing that the objective is to en- 
sure the safe and free flow of 
trade jon this ring road and the 
feeder motorways. I am sure 
that most users of these routes 
will agree that the managers of 
our nmtorways must be working 
some other objective, 
■tiie alternative is incompetence 
•beyond belief 

X anj attempting to discover 
the lajd-down objective of mo- 
torway management and have 
picked up some clues over the 
last couple of weeks. These are 
the miles of advanced warning 
signs preceding a non-existent 
obstruction and vice-versa, the 
announcements on the radio 
from police traffic headquare* 
tors that the section where you 
have been stationary for over an 
hour i is free-flowing without 
trouble and the frequent clo- 
sures of sections due to toxic, 
chemical' snillases which sire 
never witnessed!)? tiie public 

or press. 

Perhaps one of your readers] 
has already deduced the real 
objective of our motorway man- 
agers , or maybe an insider will 
disclose some information. 

John Weetman, 

43 High Street, 

Harrold, Bedfordshire. 


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FINANCIAL TIMES 


D) D. 


HI-TECH & 

BUSINESS 


Tuesday November 3 1987 


U LJ ^ 

eonimumdata 


:l •C99C. ?: 


Poehl defends monetary and interest rates stance 


BY ANDREW FISHER IN FRANKFURT 


HB KARL OTtO POEHL, presi- 
dent of the West German Bun- 
desbank, yesterday defended 
Bonn’s monetary and Interest 
rate policies against strong for- 
eign criticism* "We are not neu- 
rotic about inflation,” he said, in 
a speech doe in New York last 

night. 

Repeating West Germany's 
commitment to February’s Paris 
agreement on stable currency 
levels, he said: ”1 think It is justi- 
fied to say the Louvre accord is 
■till alive - in spite of the Finan- 
cial disturbances characterising 
the last few days and weeks. Un- 
til tiie agreement, he noted, the 
VS had been reluctant to help 
stabilise the dollar. 

Hr Poehl said the central bank 
had contributed through its 
monetary policy to the working 
of the Louvre accord. "Monetary 
policy in West Germany is any- 


tiling hut restrictive,' he said. 
Targets had been overshot in 
1988 and again this year. 

He believed there was no acute 
inflation rfek in West Germany, 
and said It was important to fol- 
low a policy which dampened 
mice esrotfatioHs. 'Experience 
has taught tts net to widt until 
prices go up, because then it's 
mostly too late.” 

In an Implied criticism of Mr 
James Baker, US Treasury Sec- 
retary, Hr Poehl said this year’s 
rise in interest rates began in 
the US, not in West Germany or 
Japan. Mr Baker last month at- 
tacked the rise in West German 
rates on securities repurchase 
agreements (a means of commer- 
cial bank refinancing). 

Those rates were still lower 
than at the start of the year, Mr 
Poehl said yesterday. These ti- 


ny, market-oriented conse- 
quences of a strong demand for 
central bank money have some- 
times generated comments 
which were anything but justi- 
fied and helpfoL* 

West Germany was not inter* 
rated in higher Interest rates, ei- 
ther in West Germany or in the 
US, Mr Poehl insisted. *We most 
certainly da not want than ris- 
ing In tiie bond market.” 

He quoted the International 
Monetary Fund's latest World 
Economic Outlook in defence of 
aging monetary policy to contain 
inflationary expectations. T am 
convinced that sustained and 
stable exchange rates are in the 
Qnai analysis only possible 
against a background of wide- 
spread price stability,” said Hr 
PoehL 

Arguing that the chances for 


gtahler currency rate* were bet- 
ter than some ' pessimists 
thought, he said huge trade im- 
balances and strong policy diver- 
gences stiD existed. Thus, he ad- 
ded: •’Overumbitlous 

commitments to peg certain ex- 
change rate levels or target 
zones ran the risk not only of 
niooMug with domestic mone- 
tary objectives, but of coHapsiiig 
when the markets test than.” 

Hr Poehl said the dollars 
more stable performance since 
February had helped the West 
German economy recover from 
its winter sluggishness. The 
planned tax cuts would give a 
Anther stimulus. But the foiling 
a hindrance to 
growth. Other obstacles, 

is lilgli mhdiHy i am} nw. 

necessary regulations, needed 
poli tic al will to be o vercom e. 


population 
fetore groi 



Karl Otto Poehl: -hot neurotic 
about inflation” 


David Marsh in Bonn examines forecasts for the West German economy 

Fuelling an economic controversy 


SLUGGISH economic growffi 
in West Germany next year is 
likely to lead to only a small re- 
daction in the massive current 
account surplus, the country’s 
five leading economics re- 
search institutes said yesterday. 

The institutes’ latest biannual 
analysis of the economy urged 
the Government to spur eco- 
nomic growth by bringing for- 
ward to 1988 Its controversial 
ae of tax cuts sched- 
i for 1990. 

The call, which adds to inter- 
national pressure on Bonn to 
relax economic policies, was 
quickly dismissed by Mr Martin 
Bangemann, the Economic Min- 
ister. 

In a joint statement with Mr 
Gerhard Stoltenfaerg, the Fi- 
nance Minister, Mr Bangemann 
said bringing forward the 
planned tax cuts of a net 
DM20bn ($&7bn) would 'endan- 
ger the positive effects on 
growth” of measures already 
taken to reduce public sector 
borrowing. 

Forecast growth of gross na- 
tional product of 2 per cent in 
1968 would represent a slight 
improvement on the 1-75 per 
cent expected this year. 

The Institutes' spokesman, Mr 
Horst Seidler or the Berlin- 
based Deutsches Zhstitut fixer 
Wirtschaftsfors chung (DIW), 

made clear yesterday that cur- 
rent turbulence on financial 
markets added to risks over- 
hanging the export-oreintated 
economy. 


WEST GERMAN ECONOMY - 1987 

How the economic institutes’ forecasts grew more gloomy 


October 

November 


1986 

1987 

GNP 

+3% 

+1.75% 

Real private consumption 

+4% 

+3% 

Real capital Investment 

+5% 

+1% 

Current account surplus 

DM60bfl 

DM75bn 

Overall public sector deficit 

DMlfebn 

DM38bn 

Unemployment 

2.12m 

223m 

Consumer prices 

+L5% 

+03% 


But the institutes are sticking 
to the basic, somewhat optimis- 
tic, assumptions that the Z>- 
Mark will remain stable in real 
terms on the foreign exchanges 
and that the US economy will 
continue to grow by around 2J5 
per cent next year. 

The report, from the Kiel, 
Hamburg, Essen, Berlin and 
Munich economic institutes, 
was seized on yesterday by the 
Opposition Social Democratic 
Party as proof that government 
policies were not working. 

The institutes, in a marked 
turn towards pessimism com- 
pared with their autumn report 
a year ago, forecast that the 
average number out of work 
next year would climb to 227m 
from 223m both last year and 

thliy . 

The current account surplus 
is likely to fall only slowly to 
DMB5bn in 1988 from DM75bn 
this year and DM80bn last year. 

Capital Investment, one of the 
main weak spots of the econo- 


my, is seen as rising by only 2 
per cent in 1988, after 1 per cent 
this year, depressed by the sub- 
dued state of the construction 
industry. 

Consumer prices are forecast 
to rise by 2 per cent in 1988 after 
CL5 per cent in 1987. All the in- 
stitutes. except the more 
Keynesian-orientated DIW, 
point to the danger that the cur- 
rent rapid rise in the West Ger- 
man money supply could store 
up inflation for the future, 
while Bundesbank president, 
Mr Karl Otto Poehl, said in New 
York yesterday, he believed 
there was no acute inflationary 
risk. 

The institutes* report offers 
substantial evidence backing 
up the view that the industri- 
alised world’* third largest 
economy is living - as ex-chan- 
cellor Helmut Schmidt put it 
last week -"below its means.” 

One of the main reasons for 
this year's weakening of growth 
is the decline In both Invest- 


ment and consumer spending 
compared with optimistic fore- 
casts only a year ago, according 
to the five institutes. 

While the institutes are rec- 
ommending greater stimulus 
through bringing forward tax 
cuts, their study also provides 
indications on why similar calls 
from both home and abroad are 
unlikely to be heeded by either 
the Government or the Bundes- 
bank, the West German central 
bank. 

Both budgetary policy, mea- 
sured by the overall public sec- 
tor deficit; and the monetary 
stance, measured by the Bun- 
desbank's money stock yard- 
stick, are on an expansionary 
course. 

By pointing to the inflationary 
dangers of the expanding mon- 
ey supply, as well as underlin- 
ing that growth in the economy 
has picked up since the lull last 
winter, the economic institutes 
have handed the Bonn Govern- 
ment two useftxl arguments to 
stick to its current economic 
course. 

Id an exercise which has be- 
come a classic example of West 
Germany's consensus-based 
methods of steering the econo- 
my, the institutes have pro- 
duced joint spring and autumn 
reports since 195L Yesterday's 
was the 75th joint study. 

The coded language of the re- 
port masks, yet does not hide 
completely, the markedly dif- 
fering views between tiie insti- 



Gerhard Stotteabog: "endasger- 
ing economic growth” 
totes on the underlying way in 
which the economy behaves and 
reacts. The monetaristrorlentat- 
ed analysis of the Kiel and 
Hamburg institutes, for in- 
stance, is at odds with the line 
taken by the DIW, which be- 
lieves the economy needs a 
Keynesian-style stimulus to 
bring down unemployment. 

A key assumption of the re- 
port- in spite of last week’s un- 
rest on the currency markets -is 
that the real (inflation- ad- 
justed) value of the D-Mark will 
remain constant over the next 
year. However, if the D-Mark 
comes under stronger upward 
pressure - and especially if the 
US shows any signs of entering 
a recession - then the resultant 
weakening of exporters’ confi- 
dence is likely to dampen for- 
ther already subdued West Ger- 
man growth prospeets for 198& 



from London bond markets 


BY ALEXANDER NKXXJL, EUROMARKETS EDITOR, M LONDON 


ORION ROYAL BANK, the Lon- 
don-based investment banking 
arm of the Royal Bank of Cana- 
da, yesterday announced its 
withdrawal from market-mak- 
ing in UK government bonds 
and Eurobonds, with the loss of 
up to 150 jobs. 

Mr John Sanders, Orion's 
chairman, said that neither 
business offered the prospect of 
an acceptable return within a 
reasonable tuna The decision 
bad no connection with the tux* 
moil in financial markets of the 
past two weeks, but was based 
on the bank’s view oflongtenn 
trends. 

Orion is the latest In a string 
of international securities hous- 
es to announce job cuts in Lou- 
don amid what is becoming a 
shake-out of players iu the over- 


crowded international capital 
markets. 

Those losing their jobs will 
include four or five directors, 
Mr Sanders said. The Royal 
Bank group’s total staff in Lon- 
don number L20Q. 

Orion was one of 27 market 
makers in the US-style 
gilt-edged market introduced 
last year with London's Big 
Bang reforms, and is the second 
to pull out since Lloyds Bank 
made the same decision in 
June. Orion had won only a 1 to 
2 per cent share of a market 
which is generally thought to be 
not of a sufficient size to sup- 
port so many dealers. 

Other houses which have 
been similarly unsuccessful are 
also expected to follow, particu- 
larly as Japanese firms plan to 
add to the intense competition. 


Daiwa, Japan's second largest 
securities house, said yesterday 
that It was applying to the Bank 
of England to be a market mak- 
er, adding its name to that of 
Nomura, the largest, which ap 
plied last week. 

Orion’s move was seen as 
more significant for the $850bn 
Eurobond market, in which ii 
has been an important player 
for many years. 

The market has seen a shrink- 
ing of new issue business from 
last year’s record levels. It hai 
also run into criticism because 
its liquidity has tended to dry 
up in difficult times, prom p tin g 
investors to plump instead for 
more active government bond 
markets. This has left exposed 
those Eurobond houses which 
do not also have strong govern- 
ment bond operations. 


ABF may drop £767m Berisford bid 


BY CLAY HARMS IN LONDON 

ASSOCIATED British Foods, 
the milling and baking group, is 
now unlikely to proceed with its 
all-cash bid for SAW Berisford 
which values the diversified 
sugar producer at £767m 
($L33bnX 

ABF said yesterday it needed 
to know more about the effects 
on Berisford of turmoil in world 
markets before it could recom- 
mend that shareholders ap- 
prove the takeover. Today’s ex- 
traordinary general meeting 
will be adjourned until later In 
the month. 

The bid, however, could be 
withdrawn as early as Thurs- 
day, the first closing date, if 
ABF fails to receive 90 per cent 
acceptances. That condition is 
usually waived by bidders who 
want to proceed with an offer, 


but in this case, it would give 
ABF an early escape route, 

ABF decided to adjourn to- 
day's meeting after George Wes- 
ton Hol dings , the Canadian- 
based company which controls 
68 per cent of its shares, said it 
could not be certain of support- 
ing the bid. The two companies 
share four directors, including 
Mr Garry Weston, ABF chair- 
man, all of whom took part in 
both decisions. 

Berisford shares, which had 
been supported during the re- 
cent crash by ABF's 400p cash 
offer, collapsed alter the an- 
nouncement They dropped to 
29Bp, only 5p above the price 
ABF paid for its 23.7 per cent 
stake in May, before recovering 
to close at314p, a 57p fall on the 
day. 


To explain the moves byi 
George Weston Holdings anti 
ABF, Mr Weston yesterday cited 
BerisfonTs failure last week to 
recommend either acceptance 
or rejection of the bid or to pro- 
duce a profits estimate for the 
financial year which ended 
September 30. 

The non-defence document 
which came out on Friday did 
not cover any of its subsidiaries 
except for general feelings of 
excitement about British Sugr 
ar,” he said. British Sugar, the 

b e et ^refiner jvhlch ^ fomlnate^ 

part of Berisford which ABF 
dearly wants to retain. 

ABF results, Page 84 


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LI Peng anxious to keep 
the record straight 


Continued from Page 1 


daring 

his student days, realising that to separate party from Gevern- 
the ramear could have damaged meat will ebvfousty be difficult 
Us leadership chances by send- to implement - if they are ever 
ing signals to the West of a major seriously Implemented. Mr Qiao 
shift in Chinese policy. has been responsible for han- 


dling internal parly security and 
•discTriUne and has been dabbed 


Until yesterday. Hr U, a vice- ~ 
premier, deferred to Yao YUln, the 'super-cop”. 

in^^hehgdrf. 

committee. Mr Yao and HrUm 
the two leaden that most diplo- 
mats suspect were chosen by de- 
<»T.tive -BcM* 

tku of reforms’ negative side-ef- 
fects. Since mid- 1985, he has 


though the pair are best de- 
"refo n ners with: 


scribed as 

vatlons.” 


Yao YUln, n. Is Urn minister 
In charge of the State Planning 
Commission, and so has had a 
major role In fesWonlag eco- 
nomic policy. But it is wider- 
that Zhao 


stood 


Zlyaag, the new 


beaded tee party’s Organisation 
t, and, at 63, is ofB- 
rafemed to as part sf the 
nhfad generation” of leaders. 

The rise of Hu QjLli- to the 
standing co m mittee is a symbol 
of the surge of reformist influ- 


pariy chie£ has occasionally be- cace. Mr Ha, long thought to ie 
come frustrated byahelackof vi- destined for success, seesned in 
shm at tiie Commission and has sorlons political trouble when 
encouraged the development of Us mentor. Ho Yaoteng, was 


the Commission for Economic 
Restructuring. 

Nonetheless, Mr Ya» has a 
good sense of hvmnr. and in his 
public appearances has shown 
tint his nund is at least flexible 
if not open. His official biogra- 
phy, released yesterday, cla im s 
that he has been *linked to many 
Important economic activities in ■*_ n _ « 

tSSSSiS^ ^^,n«e«ti mayor of Ban- 


forced te resign early this year as 
general-secretory. 

Mr Hu said sakl last year tint 
the "personal things are all very 
small tilings,” yet it is clear tint 
Hu Yeohang’s personal support 
for tho one time lea de r ©f the 
Communist youth league boss 
was crucial in his rapid rise 
through the ranks. 


The most mysterious of the 
newly Installed standing com- 
Bdttee members is Qiao Shi, who visitors, 


Jin, U Bulhn a n , was yesterday 
gjPptoted to the FatitounTlfa 
0411 is confident with fondn 


and has 


with foreign 
delivered 


apparently rises before six each sp eech es fa E n g l ish. Sympateet- 
morning. Jogs for an hour, is a to Chinese say he is a trae liber- 
non-smoker and non-drinker, tmt a^and has a recorder supporting 
has spent much of his political freedom in the arts, wlm the 
life u the backroom, d e aling “** kind east serious doubt upon 
trite internal pasty matters. Us role fa the foil of Hn Yao- 

He is also a vice-premier, and hang. 


Gorbachev denounces bureaucracy 

Cratbuied from Page 1 


The next two or three years 
would be decisive for the suc- 
cess of political and economic 
perestroika (restructuring), he 
said, and added that there was 
noway to avoid a clash between 
old and new. 

In what was evidently an 
oblique sideswipe at Mr Boris 
Yeltsin, the Moscow city Kader 
and a non-voting member of the 
Politburo, who threatened to re- 
sign because of frustration at 
resistance to reform, Mr Gor- 
bachev warned against "suc- 
cumbing to the pressure of the 
overiy zealous and impatient”. 


This criticism was balanced,' 
however; by reference to con* 
servative resistance to pm**®*' 
ko, which he accused of covertly 
using any minor setback to <Us- 
credit the entire undertaking. 

The consequences of mark- 
ing of stagnation and in- 
difference have , a much greater 
impact and cost a lot more than 
the side effects that arise tem- 
porarily.* 

Mr Gorbachev said that peres- 
troika had reached the end of it* 

first phase, which was to work 
out what was wrong and per- 
suade people change was neces- 
sary. 


On foreign policy, he 
posed no new Initiative — 
made plain that he expected a 
remodelled Soviet society to be 
fin:' more competitive with the 
Vest in providing an alienin' 
ttve agenda Cor how society 

should be ran. 

Iff Gorbachev said that, al- 
though he expected an agree- 
ment to be signed on Intermedi- 
ate Nuclear Forces, little had 
been achieved in nuclear disar- 
mament so for. He stressed that 
he bdieved antipathy towards 
the Soviet Union had eased 
around the world, allowing it to 
make effective initiatives. 


THE LEX COLUMN 


ABF loses its 

sweet tooth 


A pattern seems to be emerging 
in the dollar’s daily movements. 
Weakness in the Far East is fol- 
lowed by some stability la Eu- 
rope, and a little central bank 
support But by late afternoon 
in Europe - when New York is 
wide awake - the downward 
pressure resumes. And that is 
all to the good if it Is the Ameri- 
can politicians who need to be 
reminded of the dollar’s par- 
lous state. As one economist pot 
it, it has taken a stockmarfcet 
crash to get the politicians 
taifctwg - will ft need a dollar 
crash before they come to 
agreement? 


ABF/Rerisford 

In the 

glass world of 
British. Foods’ bid for S & V 
Berisford, the latter was yester- 
day deploring action by the for- 
mer which brought its contin- 
ued independence one step 
closer. Only the chance that 
ABF’s 400p a share cash bid 
might stili be open kept Beris- 
ford’s share price from foiling 
further than tiie 314p at which it 
closed, down 57p on the day. 
Berlaford’s shareholders might 
be somewhat 
board did 
cash, esp 
bought above that price in the 
hopes of a higher bid before the 
stochmarket "adjustment*. 

ABF is craltUy keeping its op- 
tions open until the last possi- 
ble moment with tiie postpone- 
ment of the special meeting to 
consider the bid. While it need 
not withdraw its bid until the 
meeting; which might be held as 
late as November 26. it could 
still go ahead with the offer if 
shareholders vote in fevour as 
TSB’s did yesterday in the Hill 
Samuel deal. At least ABF’s 
meeting is unlikely to last for 
near l y seven hours. 

It is clear from the delay that 
ABF - or its majority sharehold- 
er at any rate - is decidedly ner- 
vous about what might crawl out 
of the non-British Sugar partis of 
Berisford should the bid sne- 
ceeCSftfef tSrailffigfe in mar- 
ket conditions. A > 4 while Brit- 
ish Sugar wW* still be worth 
£900m plus a Sid premium even 
in today’s market, the rest may 
well n ot ma ke up the difference 
to the £787m offer. 

As a result Berisford share- 
holders are now without any 
guidance from either side ns to 
what to do. Their company’s de- 
fence document contained little 
solid matter, and no recommen- 
dation. Nor was than much 
hope that ammunition was be- 
ing held back for a later docu- 
ment, given the likelihood until 


AB Foods 

Share Price retadvs to 
FT~A AHShara Index 
105 


100 



yesterday that the deal would 
-go through thia week. The bid- 
der h««. rightly, put its own 
shareholders’ ■ interests above 
those of its target For. once a 
reference to the Monopolies 
Commission might be welcomed 
bynearty all parties. 


Orton Royal Bank 

• Orion Royal Bank was a rela- 
tively *m«ii player in both the 
Eurobond andtne UK Govern- 
ment securities markets, and it 
is not the first, and will certain- 
ty not be the last firm to head 
for the exit Nevertheless, its 
decision to pull out of these 
.markets is important because 
over foe years Orion Royal 
Bank has emerged as a useful 
barometer for anyone wanting 
to monitor the latest climatic 
'conditions in the International 
capital markets. 

It started life as a consortium 
bank (remember them?) owned 
by a bunch of blue-chip com- 
mercial banks which wanted to 
make medium-term loans in the 
fort growing Eurodollar market 
But its owners soon learned the 
tricks of medium-term lending 
and Orion lost its momentum. 
After several changes of man- 
agement and direction, one of 
its shareholders, the Royal 
Bank of Canada, decided to take 
it- over and baud itup in to “a 
London-based international 
merchant i« n> The combina- 
tion of tee financial muscle of a 
big commercial bank and the 
skills of London’s merchant 
bankers was a formula which 
several international banks 
have tried to apply to the inter- 
national capital markets; Betas 
Orion Royal Bank demonstrated 
yesterday, very few commercial 
banks have found the solution. 

Its parent may be Canada’s 
biggest commercial bank, but in 
common with many of the new 
entrants to tee UK gQts market. 


it does sot have the scale o{ 
business to eany it through the 
rough times. Its exit from the 
gilts market was not surprising. 
The same cannot be said for its 
departure from the Eurobond 
market where it has been a sac- 
cesfUl niche player. In a world 
where there has been a flight to 
quality and an emphasis on li- 
quidity, the Eurobond market is 
an obvious loser. Given the 
huge variety of small issues and 
exotic names, the Eurobond 
market can never hope to offer 
the same degree of liquidity os 
the big domestic bond markets. 


Elders 

The withdrawal by Elders of 
its complex scheme to float off 
its subsidiaries is further evi- ^ 
dence of the pressure now fin- 
ing tee more ambitions Austra- 
lian conglomerates: The chang e 
of plan should cause no Imme- 
-4iate damage, since the pro- • 
ceeds were to be distributed to 
Elders’, shareholders; but the 
scheme was plainly aimed at 
equity fond raising in the lon- 
ger term. The postponement of 
the Courage pubs flotation, 
though expected, is a more im- 
.mediate blow. Like the 192 per 
cent stake in BHP, the Coinage 
assets are now a heavy drag on 
group finances, yielding much 
less than the notional cost of 
funding. 

How serious this is cannot 
easily be deduced from El- 
ders’accounts, which have a 
long-standing; reputation for 
complexity. The latest balance 
sheet shows borrowings of close 
on AfiSbu, compared to share- 
holders' funds of Ag32bn. But 
on the asset side, much depends 
on what the stock market col- 
lapse has done to investments 
valued at A$2.7bn. Elders said 
yesterday that rights money and 
bond conversions had now 
pushed shareholders’ fluids to 
-A$A5fra, and that the BHP stake 
was still worth A$240m more 
than book value. But the debt 
portfolio, which embraces a 
wide range of instruments and . 
currencies ranging from the 
Dutch Guilder to the New Zeal- 
and dollar, is already starting to 
look old-fashioned la these 
post-boom days. 

Large parts of tee group’s 
business, brewing In particular, 
are typically defensive in reces- 
sionary times, and are strongly 
cash positive. At A53.15, the 
shares also yield 6 per cent But 
at the end of it all, the company 
looks unduly hard to under- 
stand. In falling markets, the In- 
vestor has no incentive to study 
complexity- He can always put 
his money in the bank. 


This announcement appears oa a matter of record only. 



COMMERCIAL 

BRIDGING 

a Coffins- Wilde Q Group Company 
£15,000,000 REVOLVING FACILITY 
AGENT 



ARBUTHNOT LATHAM 
BANK LIMITED 

PROVIDED BY 

Aibotfrnot Latham Bank Limited 

Royal Trust Bank (Switzerland) 

Bank of belaud 
National Anstrafia Bank 

BerfinerBank AG, London Bcancfa 
Yorkshire Bank PLC 


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' R O r L RT V C O N S l . ' LTA N : I ' S 

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SEGHON n - COMPANIES AND MARKETS 

FINANCIAL TIMES 


▲ 


Tuesday November 3 1987 


American Appraisal (UK) Urrutod 

49 WMWbH LaodML Tdcpbeae: 01409 I7W 

THE VALUE OF APPRAISAL 

BML FBI A C9PV OF OtM NCW nsnilMC 


Bilzerian launches $lbn 
takeover bid for Singer 


BY RODERICK ORAM IN NEW YORK 


SI NGER, the US defence electron- 
ics group and Dormer sewing ma- 
chine maker, has received a $50-a- 
share takeover offer from a group 
of investors led by Mr Paul Bilzeri- 
an, a Florida corpora t e raider. 

-It is the second-largest tender of- 
fer, valued at just over Slbn, sinry 
stock prices crashed two weeks ago. 

News late last week that the in- 
vestment group had acquired 9.9 
per cent of Singer sent its stock 
price soaring by almost 112. It 
gained a further $3U to $47tt in 
heavy early trading yesterday. 

Singer attracted the market's at- 
tention in August when Mesa Lim- 
ited Partnership, the compa- 
ny of Mr T. Boone Pickens, the Te- 
xas corporate raider, said it had a 
4.4 per cent stake and was seeking 
regulatory approval to buy more. 
Mesa, which has become heavijy- 
dependent on investment inwmm as 


ml and gas profits have wjHnpf^ > 
has made no subsequent announce- 
ments concerning Singer. 

Mr Bflzerian, who has yet to pull 
off a substantial raid, said last week 
that he would probably sell off Sing- 
er’s defence electronics operations 
which accounted for 83 per cent of 
last year’s sales. 

Colleagues involved in his hid 
said he would probably retain only 
the divisions «akmg portable elec- 
tric tools and gas meters winch gen- 
erated 17 per cent of 1988 sales. 

The list of companies which have 
spurned Mr Bilzerian's overtures 
include duett Peabody, Pay *N Pak 
Stores, HammenmH Paper and Alli- 
ed Stores. Shearscm Lehman Broth- 
ers is supplying bridge finance and 
advice for his raid on Singer. 

fiingpr sewing machines, the es- 
sence of its identity since it was 
founded in 1851, were spun off into 


a sew company called SSMC in Oc- 
tober 1988. Sewing manu- 

facture bad limped through years of 
pom: perfor mance despite several 

Tfffl ttffbrtSL 

Analysts are forecasting a rapid 
rise in profits from defence civ- 
ilian aerospace electronics as new 
products move from development 
into production in the year. 

Until now, its profit margins on 
defence electronics have lagged be- 
hind its competitors. 

Singer suffered a setback last 
month with the sudden death of Mr 
Joseph Flavin, 58. 

As chief executive he had led the 
company’s comprehensive restruc- 
turing. He was succeeded by Mr 
William Schmied who had joined' 
the company in 1969 to run its aero- 
space electronics operations which 
then accounted for only 12 per cent 
of sales. 


Bronfmans back Wood Gundy 
to sub-underwrite BP issue 


BY DAVID OWEN IN TORONTO 

ED PER, the Canadian fmiwmiai nnfl 
resource-based conglomerate, has 
stepped in to help Wood Gundy, the 
hhie-chip investment dealer, over 
the problems arising from its heavy 
involvement in the BP privatisation 
issue. 

Edper, controlled by the Toronto 
branch of Canada's Bronfman fami- 
ly, has agreed to sub-wtderwrite 
Wood Gundy’s 52_5m-share chunk 
of the deal. 

Under the agreement, the Great 
Lakes Group, the Edper-controHed 
financial services company, is to 
lend Wood Gundy the money to pay 
the UK Government for the shares 
it has committed to take. 

In return. Gnat Lakes will 
charge an interest rate above prime 
and wlD have the right to share in 
any profits generated from the fu- 
ture sale of BP shares. Any capital 
losses, however, will remain Wood 


Gundy’s responsibility. 

“We arranged the financing nec- 
essary to handle our entire liability 
in the event that the BP shares 
were worth zero,” said Mr Ted Med- 
Iand, Wood Gundy chairman and 
chief executive. “Qeariy, the need 
for it is now not that great” 

Without Edperis help, Wood Gun- 
dy was facing a capital loss of some 
£18m (330.6m) an the shares which 
it agreed to buy. BP partly-paid 
shares closed at 85p in London last 
week, compared with the £1.20 that 
investors had agreed to pay for the 
first of their three hurtahnentai - The 
total cost of each BP share will be 
£330. 

The Wood Gundy-Edper arrange- 
ment has prompted speculation 

th a t flw R mrn f man* might, consider 

taking an equity stake in thedeeler 
should the US bank. First Chicago, 
have second thoughts about its pre- 


viously-announced plan to bny a 35 
per cent stake for CS270m 
(USS206m). 

Mr William McDonough, the 
hank’s vice chairman, last week ex- 
pressed concern at “the pffact* of 
these developments In the 
markets” and said First Chicago 
planned to meet Wood Gundy man- 
agement prior to proceeding with 
its investment 

Mr Mfidland, however, played 
down such speculation, saying that 
"WiHft fftirag n T AmHTn int e res t ed in 
the company” and stressing that 
“we have signed a definitive agree- 
ment... We have no appointment to 
meet First Chicago at all* 

The remaining 50 per cent of the 
105m-share Canadian portion of the 
BP issue was split between follow 
Bay Street investment dealers. Do- 
minion Securities and McLeod ; 
Young Weir. I 


Sumitomo 
Life buys 
stake in 
Kleinwort 

By David LascaKos fai London 

SUMITOMO LIFE, one of the larg- 
est Japanese life insurance compa- 
nies, is to take a stake of up to 2 per 
cent in Kleinwort Benson, one of 
the laa^ j p g UK mer ch a nt hawk^ 

Kleinwort, whose shares have 
been buoyed by takeover specula- 
tion recently, said it welcomed the 
purchase. 

“We have had business relations 
with them for a number of years, 
and this is a friendly thing,” said a 
spokesman. 

Sumitomo is believed to be one of 
several .. institutions who have 
agreed to take up unused rights in 
KJeinworfs recent £144m ($247m) 
rights issue. The rights belonged to 
members of Klemworfs founding 
families who did not wish to main- 
tain their stakes at the prior level 
The rights issue, which closes on 
Thursday, will reduce the core fami- 
ly shareholding from 33 per cent to 
25 per cent 

Kleinwort has been keen to en- 
sure that the new shares found 
their way into friendly hands in or- 
der to avoid the kind of predatory 
attacks which have been launched 
on other UK merchant banks this 
year. Kleizrwort shares closed last 
night at 447p, down 3p. The rights 
issue is being made at 450p. 

A Sumitomo Life official in Tokyo 
was quoted yesterday as saying 
that, the precise 6wimg of the pur- 
chase would depend on market con- 
ditions, hut he expected the total 
price to be in the range of Y2bn 
($L4m). He said his company was 
monitoring the movement in Klein- 
worfs share price carefully. 

The purchase is file latest of 
' several m^jor investments made by 
Japanese companies in US and Eu- 
ropean financial institutions. Nip- 
pon Life, the largest Japanese life 
insurer, bought a 13 per cent stake 
in Shearscm I^hnian, tee US in- 
vestment bank in March. 


Anatole Kaletsky on bargaining that could lead to the biggest non-oil takeover in the US 

Henley in talks on Santa Fe bid 


<r - % 


COLOROLL GROUP PLC 
INTERIM RESULTS 

HALF YEAR ENDED 30th SEPTEMBER 1987 

Coloroll Group PLC is pleased to announced yet another record 
half year achievement as a result of continued organic growth 

and recent acquisitions. 


Sales (fmfllkm) 

Profit before tax (£mauon) 

Earnings per share (before exceptional item) 
Ear ning s per share 
Dividend per share 

(Unaudited) 


1987 1986 

124.4 - 44.4 +180% 

11.2 3.5 +220% 

7.8p 6.4p + 22% 

8.3p 6.4p + 30% 

2.64p 2.3p + 15% 


“There has been strong sales and profits growth in the period reflecting good 
performance in our mains tream businesses and the consolidation of 
management changes introduced into the operations acquired 

over the past year. 

Our businesses have been restructured into an integrated and highly focused 
Group serving the Home Fashion market, with strong management and a 
highly committed and well Informed workforce.” 

' {An attract from the statement of John K. Ashcroft 
Chairman fcChief Executive) 

THE BIG NAME IN HOME FASHION 

Coloroll. Of course. 


Coloroll Group PLC 

Number CkK.lOngStreet. Manchester M 2 6 AW ItiepbooerOfrl 8340180 


TALKS which could lead to the big- 
gest non-oil takeover in US history 
were announced yesterday between 
Santa Fe Southern Pacific, the big 
US transport group which is under 
orders from anti-trust authorities to 
split up its core railroad holdings, 
and Henley Group, the California- 
based conglomerate. 

The two campanil* say the bar- 
gaining could lead to an offer for 
Santa Fe worth $83 a share or 
Sfljbn. Although Henley first 
acquired a strategic stake of 5 per 
cent in Santa Fe almost a year ago, 
it was Santa Fa’s management 
which approached Henley last 
week proposing a sale of their com- 
pany for $63 a share in cash. 

Henley, which last week said it 
had taken advantage of the heavy 
falls on Wall Street to boost its hold- 
ing in Santa Fe to 14J per cent, re- 
sponded with a counteroffer of S63 
in securities and cash. 

A takeover of Santa Fe by Hen- 
ley, created last year as a vehicle 


for tee riMTirmirfag talents of Mr 
Michael Dingman, its chairman, 
would' require ambitious amounts 

Qf Creative financing . 

Henley’s war-chest is believed to 
be only around Slbn, suggesting 
teat nearly S9bn may need to be 
borrowed or otherwise raised on 
the market for a Henley bid to suc- 
ceed. 

Wall Street arbitrageurs seemed 
to remain sceptical about the deal 
boosting Santa Fe's share price by 
only £4 to S54VI, some 14 per cent 
below the price being discussed by 
the two companies and 15 per cent 
below the peak reached by Santa 
Fe in the summer, before the mar- 
ket slump. 

If Mr Dingman did succeed in 
buying Santa Fe, he would still 
have to proceed with the divestiture 
of its Southern Pacific Railroad di- 
vision. Prior to the market crash, a 
consortium of unions and manage- 
ment had offered 3750m in cash 
phis about 5800m in debt assump- 


tion for Southern Pacific. 

Mr Dingman would presumably 
also seek to sell Santa Fe's valuable 
real estate holdings. The jewel in 
the company's crown is a 208-acre 
property in the Mission district, one 
mile from San Francisco's fi n a n cial 
heart 

This holding is known to have at- 
tracted the interest of Olympia & 
York, the large Canadian property 
developer which also owns a large 
strategic stake in Santa Fe. A big 
sale of property to Japanese inves- 
tors would be another possibility 
for Mr Dingman. 

IBs company was created last 
year by Allied-Signal to spin off var- 
ious businesses the parent compa- 
ny did not wish, to own. It recorded 
a net loss of S426m in 1986 and is 
expected to show another loss this 
year. 

Despite the unattractive nature 
of its component businesses, Hen- 
ley raised S12bn in cash last year 
in an extraordinarily successful 


public offering which set new re- 
cords for Wall Street - Mr Dingman 
has initially asked investors for a 
mere 3300m, but such was the cla- 
mour to buy shares in Henley that 
tee size of the offering was in- 
creased four-fold. 

The money raised was explicitly 
earmarked for unspecified bids and 
deals which Mr Dingman might 
come up with from time to time. 

The Santa Fe deal if it went 

m nnlH P flgily nu mharfiw the 
biggest takeover ever completed 
outside the energy sector - the $8bn 
acquisition of RCA by General Elec- 
tric which was agreed in 1985. 

It is also for bigger than the two 
recent hostile bids which might 
have set new records for US finan- 
cial markets, the S8.4bn bid for Day- 
ton Hudson by Dart Group and the 
rival S6.3bn offer for Newmont Min- 
ing by Ivanhoe Partners, the pri- 
vate investment group led by Mr T. 
Boone Pickens, the Texas corporate 
raider. 


Small TSB shareholders rebel Montedison 
against Hill Samuel bid terms 2 eni** 


BY NICK BUNKER IN LONDON . 

SMALL shareholders in TSB, the 
UK banking group, yesterd ay r e- 
belled publicly against its £777m 
(SL33bn) bid for Hill Samuel the 
British merchant bwnk l at a furious 
suc-and-a-half hour e xtra o rd inary 
general meeting in London. . 

TSB’s board won approval for tee 
bid by a huge mazgin, but nhnfcen 
senior executives admitted after- 
wards that they were staggered by 
the anger displayed by some small 
shareholders. 

Mr Walter Frederick Geake, a 75- 
year-bki retired London tax-driver 
who emerged early in the meeting 
as one of the board’s most vocifer- 
ous critics, accused it of “dereliction 
of duty." 

In words echoed by about 20 
speakers from the floor, he said the 
board had no right “to throw away 
needlessly cash” by 

proceeding with the bid at 810p per 


share when last month's stock mar- 
ket collapse had halved the price of 
merchant bank shares. 

Another individual shareholder , 
Mr Peter Anderson, a credit con- 
troller from Isleworth, west Inn- 
don, told file board: "You will be 
paying £200m more for the shares 
of IBn Samuel than you need to.' 

He later ripped up a voting form 
in front of Sir John Read, TSB’s 
chairman. He told reporters he had 
come iwwiy he mgnght “wider 
share ownership was a good idea" 
but was disgusted with what he saw 
as the board's unwillingness to lis- 
ten to views from the floor. 

While only perhaps a few dozen 
of the 480 shareholders present at 
the meeting actually spoke, there 
was applause at one point for calls 
for a vote of no confidence in Sr 
John. He said later that he had ex- 
pected “nothing like this at all” 


The meeting, held in the Method- 
ist Central Hall Westminster, be- 
gan prom ptly a t 11am. Mr Peter 
Rowland, TSB's group company 
secretary, was able to announce on- 
ly at 525pm that shareholders had 
voted in favour of going ahead with 
the acquisition at 810p a share. The 
final poll figures showed 117m. 
votes in favour of tee hid, and only 
i2-39.m votes against 

Sir John wiststerf throughout the 
meeting and afterwards that share- 
holders who attended the meeting 
were only a tiny minority of the 
426,000 names on the share reg- 
ister. They could not be allowed to 
override the will of the majority, 
who had voted by proxy to agree to 
the bid. 

He faced repeated accusations 
from the floor, however, that he 
was using his 290m proxy votes to 
“steam-roUer” the issue. 


By Alan Friedman In RBai 

MR MARIO SCHIMBERNl chair- 
man of Italy’s Montedison chemi- 
cals group, has written to the presi- 
dent of the ENI state hnMiwg group 
in Rome with a proposal to pool the 
two group's chemicals activities. 

The letter is the latest move in a 
lengthy saga of talks between the 
private-sector Montedison and ENI 
over possible ventures. 

Montedison said it could not com- 
ment on the letter but stressed that 
aside from any ventures its offer to 
acquire Rnichpm, tile state chemi- 
cals group, remained “valid.” 

Professor Franco Revigtio, ENI 
president, said Enichem was not for 
sale but joint ventures were still a 
possibility. 

Industry observers believe the 
Moutedison-ENI talks have now 
reached an impasse. 






30 


Financial Times Tuesday November 3 1987 




, INTL. COMPANIES & FINANCE 

BFCE mwis Andrew Fisber on the rehabilitation of a West German shipping group 

Hapag-Lloyd finds calmer watem 

of its shares 


%J£lkrZ»% 

y, 





h|sr Scotch 



- wr 


Famous Grouse 

Quality in an age of change. 


By Georgs Graham In ftrta 

BASQUE Francaisc in C om- 
merce Exterienr (BFCE), the 
French state-can trolled bank, 
hopes to open its capital to out- 
side Invertors, Including cu> 
tamers and employees, ss early 
as nest year. 

Use bank, which has expan- 
ded its activities beyond its 
traditional trade finance role 
to become France’s 10th lar- 
gest bank, has already changed 
Its statutes to allow the recent- 
ly privatised Sodete Generate 
to remain a shareholder. 

Three other BFCE share- 
holders - Basque Nafionale de 
Paris, Credit Lyonnais and 
Credit Agricole - are eventaal- 
ly also to be privatised, and fta> 
fcare statates will allow any 
hank or financial company to 
own shares. 

Mr Michel Freyehe, BFCE*s 
president, says that this 
change already gives the bank 
a great deal of roes to seek 
new shareholders, since many 
insurance co mpan ies can take 
through ******* h *» H — ^ 
subsidiaries. 

He wants to enlarge his 
shareholder register still far- 
ther, however, while keeping 
state-controlled iastttntzen* 

sack as the Caisse des Depots - 

which is wilting to reduce its . 
existing 25 per cent stake - In a 
majority of at least SI per cent. 

The bank is likely to see a 
decline in profits ftom its ac- 
tivities as a state trade finance 
Institution of FFrttm ($10JSm) 
tills year and op to FFrttn. 
next year, as French exporters 
continue to win fewer big con- 
tracts. 


To the Holders of 

oujDBULroiin^ . 

TVBfTY-fflBS 

flaw A Floating Rate Bonds Due May 1, 2017 

Pursuant to the Indenture dated as of March 11. 1987 between 
Collateralized Mortgage Obligation Trust Twenty-Three and 
Texas Commerce Bank as Thtstee. notice is hereby given that the 
interest rate applicable to the above Bonds for the interest period 
from November 1, 1987 through January 31. 1988 as determined in 
accordance with the applicable provisions of the Indenture, is 
8.15% per annum. Amount of interest payable is S 16.36 per $1,000 
principal amount. 


GOUJHBUira 

HBHY-THSE 


To the Holders of 

COliiirHUIIJZBl MORTGAS nUBffRQi TRUST EnfISl 

Class A-l Floating Rate Bond Due February U 2017 

Pursuant to the Indenture dated as of November 26, 1987 
between Collateralized Mortgage Obligation Trust Eighteen 
and Items Commerce Bank as Trustee, notice is hereby given 
that the interest rate applicable to the above Bonds for the 
interest period from November 1, 1987 through January 31, 
1988 as determined in accordance with die applicable 
provirions of the Indenture, is 8.25% per annum. Amount of 
interest payable is $14.94 per $1,000 principal amount. 


CQUXTBUUZBI MK1GAS OflJGAIBI TBBST BGHIEBi 



Global Natural Resources Ltd 

A Scheme of Arrangement dated 17th May 1983 
providing, among other things, for the exchange of 
bearer shares of Global Natural Resources Limited, 
formerly Global Natural Resources PLC, a company 
organised under the laws of England (Global -UK), tor 
registered shares of Global Natural Resources Inc. a 
company organised under the laws of the State of 
New Jersey; USA (Global -USX became effective In 
July 1983. Pursuant to the Scheme of Arrangement 
the issued and outstanding shares of GlobaHJK 
have been cancelled. They entidethe hokJersorty to 
obtain registered shares of Global -US in exchange 
for their bearer shares of Global -UK and have 
oth erwisaceasedJo have, effect i-v 

Holders of shares of GlobaHJK will not be entitled to 
receive dividends or notice ofmeetings or beable to 
vpte or otherwise participate in the affairs ofGtobaf- 
US unless and until their bearer shares of GlobaHJK 
and the Form of Application to receive registered 
sharesof Global-USJegibly completed, are received 
by the Exchange Agent named be low and the shares 
of Global-US are registered in the name of such 
holders. Accordingly holders of bearer shares of 
Global-UK are strongly urged to write to one of the 
addresses given below to obtain Forms of Appicatlon. 

Forms of Application may be obtained from the 
following: 

Exchange Agent: 

Registrar and Transfer Company 

Attn: Exchange Department 10 Commerce Drive 
Cranford, New Jersey 07016, USA 
or from: 

Global Natural Resources inc. 

5300 Memorial Drive, Suite 900 
Houston, Texas 77007, USA 
or from: 

Hambros Bank Ltd 

Attn: Stock Counter, 41 Bishopsgate 
London, England EC2P 2AA 


This announcement appears as a matter of record only. These Securities have not been registered under the 
United States Securities Act oil 833 and may not, as part of the distribution, be ottered, sold or 
delivered, directly or Indirectly, in the United States or to United States persons. 


New issue / October, 1987 


i U.S. $100,000,000 

TRINOVA Corporation 


6% Convertible Subordinated Debentures Due 2002 


Salomon Brothers International Limited 


Morgan Stanley International 


BNP Capital Markets Limited 


Daiwa Europe Limited 


Dresdner Bank 

Al Ji i n i f i Wwn te 


Bear, Steams International Limited 


Banque Bruxelles Lambert &A. 


Union Bank of Switzerland (Securities) Limited 



HAPAG-LLOYD, the Wert Ger- 
man shipping and travel group 
that fan on hard times five 
years ago, is baying back the el- 
egant tnrn-of-the-c en t uiy head- 
quarters bunding tn Hamburg 
that it had to sell as .part of its 

recovery programme. 

The DMlIOm proceeds from 
the sale to the Xdona insurance 
company were a vital element 
in the restructuring of Hapag- 
Lloyd, which had overexpan- 
ded in shipping ahead of the 
collapse in freight rates and 
had pushed too rapidly into the 
airline business. 

Today, the group Is back in 
profit, though still from 

the snipping downturn and it 
has a raft of new shareholders, 
mostly in allied areas: Lufthan- 
sa, the alitiw group; KaufhoC 
the store and travel group; the 
Veba energy concern; Gevaert, 

MOT. 

■Taking advantage of Hapag- The group is not revealing ti 

k? p ” ,ve iL, j ft n a a ~ e e B ' priee it iriH pay early next yea 
Deutsche Bank and Dresdner it «riii »iin 


oped less satisfactorily. The 
Aim situation in container snip- 
ping, still Hapag-LIoytT* main 
activity, hit earnin gs. Inerrawd 
depreciation also depressed the 

“iSs'jear, say* Mr Kruse, 
group net profits showdbe 
^slightly better* than the DM53xn 
of 1988. This was well down on 
the DlflOOm earned in 1985, 
with liner (scheduled container 
service) shipping suffering from 
continued over-capacity ana 

St Se^1nttedollar also hurt 
the group’s liner income. 

The currency’s further slide 
thin year has offset the effect of 
extensive cost-cutting at Hap- 


cy in the early 1980s- combined 
net losses in 198Z and 1883 were 
DM218m - Ur Erase is still cau- 
tious. 

-We think we will be well ad- 
vised to keep our powder dxy t 
stay in the businesses we know, 
and wait for a more predictable 
environment," he says. 

With its conservative depred- 
ation policy and strong cosh po- 
sition, he believes Hapag-Uoyd 
is well equipped to ride out the 
next few years. 

The enforced restructuring, 
which cost more than DlQOOm, 
came early in the shipping 


The currency’s further slide downturn, 
this yoarhaaoffset the effect of “It was most unfbrtun«e at 
SSe cost-cutting at Hap- the time, but it was lucky that 
afrLlcyd, notes Mr Kruse me- we were forced earlier than olh- 
f n iT v . t .in^r shipping now ac- ers to cot costs to the bone, so 
counts for 85 per cent of the we were less effected fry the 
group’s business, against 75 per downturn in shipping, the 


cent three years ago. 
Tourism, including 


chairman says. 

Mr Dan White, transport ana- 


and TDLthe German torerora^ Hans Jakob Knram watting far landing charter air- lyst with County NrtWest in 

ana TUI, the German tour open- ««« predictable envtamment Lfd tte Euxopa cruise ship, London, believes that with Hap- 

££££ Thejnmy i, no. a* SOS'* 

pnee it will pay early next year, Thestrone D-Mark and bolt-down position' for a future 

^k£je^StiS?iofatS£ StoiSfaSSIcSSianinS^ in which container shipping re- 

« nLfi-SS*.®Sj5 ESS?* * he 10 » growtll expected to case next »S5S3SSSSSS. 


hard times, bat the company is 
now committed to a fall pay-out 
on all shares. 

Mr h«ti» Jakob * h vf T '- 


paywRit With more than DM700m Hapag-Lloyd’s profits or 
($40&9m) in cash, Hapag-Lloyd ism should be about 10 pe 
y chair- can afford to buy its own head- ahead in 2987 . In liner shi] 
haseof quarters, while financing its however, "we shall be just 


man, says of the repurchase of quarters, while financing its however, "we snail oe jusi 
the neo-classical headquarters, five-year DMlbn investment in the black.” The group 
a pro mine nt w*»h if« programme in replacement con- ates cargo ships on North 


stone fa red * and weathered talner ships and aircraft for its 
green copper roof on Ham- tourist flights. Last year, cash 
burg’s Umar Alster lake: "It's flow rose. by 6 per. cent, to 
the last bit of patching up in onr DM333m. - 
recovery. * Profits, though, have devel- 

Swedish stockbroker has 
trading licence revoked 


growth is expected to ease next Mr Kruse does not expect con- 

^ear tainer shipping to pick up satis- 

Hanag-Uoyd’s profits on tour- factorily until the 1990s. The 
ism should be about 10 per cent collapse in world financial mar- 
ahead in 1987 . In liner shipping. kets has clouded the outlook for 
however, "we shall be just about trade, especially with the US, 
in the black" The group oper- bat may also brake the expaa- 
ates cargo ships on North Atian- sion in liner tonnage, 
tic. South American, and Far "It could,” Mr Kruse notes 
Easter n routes but the bulk of hopefully, "produce an earlier 
profits stem from tourism. consolidation.” In spite of the 


After the group’s painful travails of the liner business, "it 
niimh back from near-bankrupt - is an industry that has a future.* 

Spanish bank improves 
pre-tax profits by 23% 


BY SARA WEBB M STOCKHOLM 

SWEDEN’S Banking Inspector- 
ate yesterday revoked the bro- 
kerage licence for Civic Pond- 
kommisslon, a medium-sized 
Swedish brokerage, as it had vi- 
olated regulations concerning 
share and options trading. 

The inspectorate’s tough ac- 
tion follows a series of options 
which it considers 
damaging to the reputation of 
the young options markets. 

In a strongly-worded state- 
ment, the inspectorate criti- 
cised Civic for its 'nonchalance' 
and Iseriou a lack of r espect” for 
the laws and regulations con- 
cerning share and options trad- 
ing. 

The last time the inspectorate 
used its power to revoke a li- 
cence was in 1978 and con- 
cerned the brokerage firm J*-‘ 
cob a onBonsbach- 

Mr Lacs Hedberg, of the tt- 
spectorxta, said Civic bad bro- 
ken several regulations and had 
lacked adequate internal con- 
trols, especially in options trad- 
ing where the company had 
failed to obtain signed a g r ee - 
ments with customers over lia- 
bility. 

Civic said it had lost about 
SKriOa (g4Am) when a former 
shareholder was unable to pay 
for losses made on index op- 


tions, forcing it to bear the 
losses. 

In other respects. Civic failed 
to separate shares belonging to 
clients from those owned by the 
brokerage, the inspectorate 
said. 

Mr n °^«Ti JarteH, managing 
director of Civic, said he was 
aware of the law which requires 
separate accounts for clients 
«mi thn company but claimed it 
was common practice not to 
separate accounts. 

The inspectorate said Civic , 
hi d not checked whether cli- 
ents who wanted to sell their 
shares had actually owned them 
in the first place - as a result. 
Civic had had to borrow shares 
from other clients’ deposits to 
ftilffl trrllirg »^prii vnw nfaL 

Mr Jartell admitted this had 
taken place with Civic’s regular 
' customers. — — >. * 

Civic started 'business five, 
yean ago and has a share capi- 
tal of about SKrlOOm. profits 
last year reached about 
SKrlQm. 

Mr Jartell said the company 
would be unable to take on any j 
new business until it had been 
taken over. Takeover discus- 
sions with Consensus, another 
brokerage firm, were underway, 
be said. 


BY OUR FINANCIAL STAFF 

BANCO DE VIZCAYA. Spain’s 
fifth largest commercial bank 
which last year came close to 
establishing a joint banking 
venture with West Germany's 
Dresdner Bank, reports a strong 
rise in profits for the first nine 
months of 1987. 

At the pre-tax level, profits 
rhave increased by 23 per cent to 
PtaltL8bn ($163-5m) compared 
with the same period a year ago. 
This follows an advance of near- 
ly a third in gross operating 
profits and a solid increase in 
the bank’s financial margin. 

Vizcaya’s operating earnings 
jumped by 32 per cent to 
pta37bn from PtaSIBbn a year 
ago. Its financial margin wid- 
ened by 15 per cent to 
PtafiOSbn. 

, The bank stressed it could 
give no more than broad details 
of its operating performance in 
the nine months. Provisions and 
depreciation charges rose to 
Pfcal7-5bn, while profits from 
(disposals amounted to Pta459m_ 


At the end of September. VLz- 
caya, which is based in Bilbao, 
had total assets of PtalJJSObn, a 
19 per cent increase over the 
period 12 months earlier. 

The nine-month operating 
performance represents a far- 
ther steady improvement by the 
bank over the third quarter. At 
the six-month stage, pre-tax 
earning s were 18 per cent 
higher, at PtallJ9bn. 

Vizcaya's talks with Dresdner 
Bank, aimed at forming a joint 
banking venture in Spain, were 
cordially ended in May last 
year. 

At the time, Vizcaya stressed 
it had not shelved plans for col- 
laborating with a foreign bank. 

However, it recently took ex- 
ception to having Torres Hos- 
tench, the Spanish paper group, 
as a shareholder and bought 
back the paper company’s 4.65 
per cent stake in the bank. 

The buyback was completed 
last month and it cost Vizcaya 
the equivalent of $160m. 


Flat Thomson first half 


BY PAUL BETTS IN PARS 

THOMSON, the French state- 
controlled defence and consum- 
er electronics group, yesterday 
reported flat first-half consoli- 
dated net earnings of FFrLMbn 
<$195m). 

First-half sales were also un- 
changed at FFi2&5bn. The 
group expects to report higher 
profits for the whole of the year, 
compared with the FFrLBbn 
earned in 1986. 

However, group sales are ex- 
pected to decline to FFrS&5bn 
this year from FFr62.65bn. This 
reflects, changes in the group’s 
structure, including the sale of 


Italtel forecasts 
higher earnings 

ITALTEL, the Italian telecom- 
munications group, should port 
net profits in 1987 significantly 
higher than the L75.1bn ($58. 8m) 
reported in 1986, Mrs Marlsa 
Bellisario. the managing direc- 
tor, said, Reuter reports from 


Its medical equipment division 
and the removal of the semicon- 
ductor division from the consol- 
idated accounts following the 
semiconductor merger between 
Thomson and SGS of Italy. 

On a comparable basis, sales 
would have increased by 4J> per 
-cent this year over the last 12 
months. 

Moreover, group sales next 
year will be boosted by Thom- 
son’s acquisition of General 
Electric’s BCA consumer elec- 
tronics business which is now 
being completed. 



Earlier this year, the state- 
owned organisation reported a 
50 per cent rise in first-half 
pre-tax profit, to L58.1bn. 


HALIFAX 

BUILDING SOCIETY 
£150000000 
Boating FWte Loan Notes 
Due 1998 (Series A) 


c uouinw £ 3 & 8 Z 
•i wwin » oa&n 


NOTICE OF REDEMPTION 

sSl 

BANCO DI ROMA 

London Branch 

ECU20,000,000 

Negotiable Floating Rate 
Certificates of Deposit due June 1989 

NOTICE IS HEREBY GIVEN io die holder* of" rhe Cwnrt- 
raoa of Depos it (th e “CerdficateO in accordance with Condt- 
non 3 of the terms of the Certificates, av printed upon die 
reverse thereof that Banco di Roma (die “Bank") ha* ctccicd 
to re-pay the principal amount of the Ccnificaic* mi lK<h 
December 19K7 (the “Redemption Date"). I’jvnicm of the 
prmdpo) amount upon each C erdfieue, together with aivrucd 
interest thereon to the Redemption Date, will be made mi the 
Redemption Dare against presentation and surrender of" the 
Certificates at the London Branch of the Bank at 14/IK Eist- 
chcap. London EC3M IJY. 

Interest on the Certificates shall cease to accrue from and after 
the Redemption I>atc. 

Mitsubishi Finance IntmuiKni^i Limited 
as Manager and Agent 

3rd November 1987 


NQRWEST CORPORATION 


SaClETE GENiERALE DE BELGIQUE 


GENERALE MAATSCHAPPL/ VATsf BELJ3IE 

Pnfafle Limited Company 

Incorp or ated in Brussels by Royal Decree an 28 August 1822 
Registered Office 30 rue Royale, 1000 Brussels 
Trade Register Number Brussels 17.487 

The Management is pleased to invite shareholders to attend in the 
company's head office al 30 roe Royale, Brussels, on Tuesday November 
24, 1987 at 1U0 am the Annual General Meeting, is accordance with 
Article 32 of the Memorandum and AitieJw of Association, to vote on the 
following agenda: 

AGENDA 

App ointm e nts to be made in accordance 
with the company's statutes . 

In order to attend this Annual General Meeting, shareholders must, in 
accordance with Article 29 paragraph 2 of the Memorandum and Articles 
of Association, deposit tbeir shares by Tuesday November 17, 1987 ni the 
latest, either with the company or with Banque Beige Limited. 

R. MORETUS, Secretary R. LAMY. Governor 

Brussels 

November 3, ‘1987 


Norwest Corporation 

1 U.S. $100,000,000 

Hosting Rate Subordinated Capital Notes due 1998 

the six months 30th October, 1987 to 29th April. 1988, the Notes 

ff ^ H 25% P** a*™™ with an interest 

amount of U.S. $410.76 per U.S. $10,000 Note. 


Australia and New Zealand 
Banking Group Limited 

(Ineorporaud uAhlimtud hMtrj mthe Si me of Vicuna) 

U.S. $300,000,000 
Perpetual Capital Floating Rate Notes 
Fw die six months 30th October, 1987 ro29th April, 1988 rheNoies 

'XinZZZu fESUF °f Sl 0875 * v* annum «hth an amount 

^; 87petU,S - 51 °.°00Nore and U.S. $10,221.70 
per U.S. $250,000 Nore, payable on 29th April, 1988. 

Lgtad on the Luxembourg Stoc k-Exchange 

MBankerslrust 

LJ Company, London Agent Bank 






Financial Times Tuesday November 3 1987. 

¥>ur Shares 
Should Follow 

Idbur Products 
To America— 






Even in these turbulent markets, one 
thing is dear: Today’s stock trading is 
international. Many international companies 
are establishing a presence in the U.S. stock 
market through American Depositary 
Receipt trading of their shares — a fast, sure 
way. 

Most choose the NASDAQ market, 
the fastest growing stock market. The 
reason: The securities firms who are the 


NASDAQ market. NASDAQ’s network of 
dealers indudes the largest, best capitalized 
securities firms in the world. 


The relationship American ? 
Depositary Receipt companies have with their 
NASDAQ dealers (the average NASDAQ 



ADR issue has 13 
dealers) leads to the 
sponsorship interna- 
tional companies need 
to succeed in the 
American stock 
market. Sponsorship 
means greater 
research coverage 


and more access to investors. 

That is why NASDAQ has more 
American Depositary Receipt issues than 
any other market, 95 of the 128 ADR issues 
now trading. Among them: Beecham 
Group, Cadbury Schweppes, Electrolux, 
English China Clays, Fisons, Fuji Photo, 
Gotaas-Larsen, Jaguar, Moet-Hennessy/ 
Louis Vuitton, NEC, Nissan, Reuters, 
Eh6ne-Poulenc, Tokio Marine & Fire, 
Toyota Motor Corp., Waterford Glass 
Group, Volvo. 

If you’re considering entering the 
U.S. markets to increase your access to 
capital, broaden your investor base, or follow 
your products to North America, learn 
about NASDAQ. Attend the Financial Times 
Conference on American Depositary 
Receipts in London on November 11 & 12. 
Or get more information on NASDAQ and 
ADRs from J. Lynton Jones, Executive 
Director, Europe, NASDAQ 
International, 43 London 
Wall, London EC2M 5TB, 
telephone: 01-374 6969. 



NASDAQ is the National Association of Securities Dealers Automated Quotations System. NASDAQ replaces stock exchange trading floors- with computer screens. Dealers 
in hundreds of locations display bids to buy and offers to sell, competing for institutional and individual investor order flow openly and publicly — right on the computer screen. 
NASDAQ, the model for the new SEAQ System of the International Stock Exchange, is changing the way securities are traded around the world. 


1 


Financial Times Tuesday November 3 1987 


INTERNATIONAL CAPITAL MARKETS 


Alexander Nicoll on the latest withdrawal from the Euromarket 


Orion retreats from the crush 


TEE SHAKEront in the Euro- 
markets is now definitively un- 
der way. Orion Royal Bank, 
which polled oat of the Euro- 
bond market yesterday, is an in- 
stitution for which the Euro- 
markets have been central for 
many years. Its decision that 
Eurobonds are not likely to be 
sufficiently profitable for the 
foreseeable future will fuel 
boardroom discussions around 
.the world. 

The overcrowding of both the 
Eurobond and gilt-edged mar- 
kets is well accepted and deci- 
sions to withdraw have long 
been expected. Nevertheless, 
Orion’s move resuscitates de- 
bates about what it takes to be 
successful in an increasingly 
difficult Eurobond market It al- 
so leaves open questions about 
Orion's own future strategy and 
identity. 

In itself, the decision to with- 
draw from the gilts market 
barely raised an eyebrow yes- 
terday. It has been widely as- 
sumed that many of the 27 mar- 
ket-makers which entered the 
fray at Big Bang a year ago 
would fail to win sufficient mar- 
ket share and would be forced 
to dropout Others are expected 
to follow the two which have al- 
ready done so - Lloyds Bank 
pulled out in June - especially 
as competition is likely to be- 


come even more intense if the 
Rank rtf England accepts appli- 
cations from Nomura and Dai- 
wa fo join the market 
The implications for the Eu- 
robond market, however, are 
more for-reaching. ' 

Orion joins several other 
houses which have either 
closed their Eurobond business 
or reduced it considerably, ar- 
guing that it is difficult to earn 
an adequate return. Yet it is by 
for the largest player to have 
done so, and is the only one 
which has a substantial pres- 
ence in the new issue market - 


ery other active area of the mar- 


though this had already 
slipped. In 1988, the bank 
dropped out of the league ta- 
ble* of the top 20 lead managers 
of new bonds. 

A year ago, when Hr John 
Sanders was recruited from SG 
Warburg as chairman, the bank 
was trying to concentrate highly 
successful "niche* sectors of the 
market such as Australian dol- 
lar bonds. Although the busi- 
ness was not enormous, Orion 
Had a dominant position in Aus- 
tralian dollars. It was, as Mr 
Sanders said yesterday, a "nice 
niche market and it was the on- 
ly game in town.” 

But it became less and less 
profitable as many other banks 
entered the same sector, creat- 
ing overcr o wding just as in ev- 


In this sense, the Eurobond 
market may appear to sow the 
seeds of its own destruction, 
with the players constantly eli- 
minating their own ability to 
make a profit There are also 
well-rehearsed criticisms of the 
market’s liquidity, which have 
come to the fore in the past two 
weeks as government bond mar- 
kets have met the liquidity 
needs of investors while the Eu- 
robond market has been con- 
spicuously unable to do so. 

Many Eurobond specialists 
believe, however, that it is nec- 
essary to show foil commitment 
and aim for dominance in the 
Eurobond market - if not in all 
areas of it, then in specific sec- 
tors - to be successfiu. They see 
the market slimming down until 
it consists mainly of larger play- 
ers with the clout to win man- 
dates and with a strong investor 


and selling Eurobonds among 
market-makers rather than to 
investors. 

Orion, a former consortium 
bank which was bought by Roy- 
al Bank In 1981, Is thought by 
many to have lacked a commit- 
ted strategy to tackle the Euro- 
bond market. Its loss of many 
able staff over the years Is part- 
ly attributable to this percep- 
tion. Critics of yesterday’s move 
found the same lack or strategy 

to yesterday's announcement. 

Mr Sanders, however, is ada- 
mant that a cohesive strategy is 
to place, and that it has the foil 
backing of Royal Bank. Though 
the decision to withdraw was 
taken to London, it was support- 
ed- fay the Toronto headquar- 
ters. 


Euro-equity 

syndication 

guidelines 

fromIPMA 


Prices ease ahead of US 


Treasury auction 


BYCUKFEM80N 


By Ow Euroraartots 9MI 


base, as well as a strong dealing 
desk to give confidence about li- 
quidity to both borrowers and 
investors. 

Marginal players tanking 
these attributes will find it in- 
creasingly hard to survive. They. 
win be increasingly unable to 
justify the costs of Eurobond 
operations, with expensive staff 
and equipment, which primari- 
ly play “pass the parcel* - buying 


Retrenchments In London's International markets In 1987 
Date Pulled out of 


UoydsBank 
S/warson Lehman 
Chemical 
Salomon Bros 
LF. Rothschild 
Dean Witter 
Saudi Inti Bank 
Orion Royal 
Hill Samuel 


Eurobonds and gilts 

(Did not withdraw from any market) 

Primary eurobonds (and reduced trading) 
Commercial paper (and US municipal bonds) 
Reduced Eurobond staff 
Eurobonds 

(Did not withdraw from any market 

Eurobonds and gifts 

To cease Eurobonds on TSB takeover 


Orion’s review of business 
strategy, he said, has identified 
core businesses for which it 
sees excellent prospects. Kltcat 
and Althea, the UK stockbroker 
which the group bought, has 
been successful, and Hr Sand- 
ers laid particular stress on his 
statement that Royal Bank Is 
unequivocal about its intention 
to develops strong equities un- 
derwriting and trading capabil- 
ity in Canada." This, be said, 
"will be a great advantage to us 
internationally.” 

Talks on the acquisition by 
Royal -Bank of a substantial 
stake in Wood Gundy fell 
through earlier this year. 

Some to the marke t found ! 
contradictory Orion’s decisions < 
to pull out of the gilts market 
but to continue in what it called 
"Umlti-government bond trad- 
ing'. Mr Sanders said, however, 
that it was feasible to provide 
advice and trading services to 
customers on the foil range of 
international securities without 
undertaking to wmrfc-nfg in 
them to other processionals. . 


THE INTERNATIONAL Prima- 
ry Market Association, the trade 
MsoctoH— heesea ac- 

tive la the Eurobond primary 
market, has approved a check Ust 
et Items feat it recommends 
should be disclosed by lead man- 
agers when syndicating a Enra- 
equity issue. 

Ike diarlogiue list is sees as 
the most important af she new re- 
commendations a pprov e d by 
DMA's board last Friday. These 
are the Unit guidelines it has 
produced fo cover foe Emrs-equK 
ty market 

Ironically, foe recommenda- 
tions appear at a time when Ei- 
re-equlty issuance seems certain 
(a be severely depressed by the 
worldwide stock market crash. 

The check list of details to he 
disclosed has been devised amM 
complaints that co-managers 


PRT flUSnr/WRn earinriti most 

sectors of the Eurobond market 
yesterday, althongh dealing was 
subdued ahead of tills week's 
US Treasury bond auctions. A 
public holiday to some Conti- 
nental centres, and the pros- 
pect of today’s holiday in Japan, 
also cut trading volume. 

Sentiment to the Australian 
dollar bond market was de- 
pressed fay Orion Rival Bank’s 
announcement ft was withdraw- 
ing from market making in Eu- 
robonds. Orion was generally 
reckoned to be the second lar- 
gest Australian dollar bond 
market maker after Hambroa 
Bank. 

Dealers initially marked 
prices of many outstanding Aus- 
tralian dollar bonds as much as 
a foil percentage point lower. 

Uncertainty about whether Ori- 
on would continue to unwind 


dollar, and amid concerns that 
the Federal Reserve might now 
be stepping back from its gener- 
ous credit st nWf *** of the last two 
weeks- 

Priees of lD-year Eurodollar 
bonds closed about % point low- 
er; Overall selling was light, al- 
though the longer end of the 
market was under condoned 
pressure as investors switched 
into shorter-dated securities. 


INTERNATIONAL 
BONDS 


joining totenattonal equity un- 
derwriting group* have same- 
times received Inadequate infor- 
mation. 

The guidelines, covering 


meats and stabilisation charges, ! 
are adapted foam existing reemn- 
mendat fams aa debt instruments, 
DMA said yesterday. Bnf Acre 
la a new recommeadatiau toying 
down a time limit for foeAriiv- 
etyri share certificates. 

In a separate move, Mr Anuta 
Mattie, (malzman of DPMA and 
managing director off Union 
Bank af Switzerland, said after 
Friday’s meeting that DMA's 
h e ar d h ad condemned p rice 

ttoTprtmaiy and^aecondary msr- 


oq dealers for the zest of the 
day. 

Dealers said Orion's surprise 
announcement was particularly 
unfortunate, given that the Aus- 
tralian dollar sector was other- 
wise Showing signs of recovery 
after sharp price fells last week. 
This had sent yields up to 
around 15 per cent, tempting re- 
tail >| |frt i into the mar- 
ket 

US Treasury bonds fell fol- 
lowing a renewed slide to the 


Storli^g bond dealers were 
stiff preoccupied whether a fur- 
ther cut to the UK’s 9*4 per cent 
base lending rates would 
emerge. Some had been expect- 
ing this to emerge last Friday, 
fl<h»r Mr Nigel Lawson’s an- 
nouncement that the £ 12 ba 
British Petroleum share issue 
would go ahead. 

Attention will now focus on 
the Chancellor’s Autumn state- 
ment today and, more impor- 
tantly, tomorrow’s Mansion 
House speech, at which he is ex- 
pected to explain the govern- 
ment’s monetary policy. 

Eurosterling bona prices 
eased by around % point yester- 
day, although slightly outper- 
formed a lacklustre gilt market. 

Sanwa International led the 


day’s two new Eurobond issues • 

neither of which is expected to 
see active trading The first was 
a $3Sm five-year floating rate 
note, secured on a bunch of Jap. 
anese ex-warrant bonds. Issued 
Flashes Cayman Islands ve- 
hicle, the bond pay* 21 basis 
points over six-month Loudon 
interbank offered rate. 

Sanwa also led an NZ$80m 
five-year FRN for Sanwa As*, 
tzalia Leasing, paying 45 basis 
points under the six-month New 
Zealand bank bill rate. It may 
be put at par and. like Flash Z* 
bond, is priced at 100 . 10 . 

In the D-Mark Eurobond mar- 
ket, profit-taking - following the 
gains of the last two week* • 
pushed prices down by about V, 
point, though trading was quiet 
Supranational bond prices fell 
by as much as 30 basis points. 

Domestic bond prices were 
mainly unchanged. The average 
yield was 6.10 percent 

Swiss franc foreign bond 
prices closed with gains ranging 
between % and one point to ac- 
tive trading. 

Twin SFr75m Issues appeared 
for the Kingdom of Brigham, a 
five-year 4 % per cent bond was 
led by JSredietbank Suisse, and 
a four-year 4K per cent bond by 
Credit Suisse. Both were' priced 
atlOOVfe. 




EOE may close market-maker 


BYUUJRARAtMMAMSTERDAM 


First yen CP 
to be launched 
this month 


Japan likely to buy US T-notes 


THE JAPANESE Ministry of Fi- 
nance has given formal notice 
to banks ana securities houses 
that companies are officially 
authorised to issue yen com- 
mercial paper (CP), enabling 
the first CP to be launched on 
November 20, Beater r ep orts 
ban Tokyo. 

MoF officials said that CP ma- 
turities will range between one 
and six months, while the mini- 
mum issue .unit is YlOOm. Both 
securities houses and banks can 
underwrite CPs. .• 

CP will be free from withhold- 
ing tax 


THE BANK of Japan (BoJ) is A senior official at the Mop’s expected baying of three-year 
likely to buy US three-year International Financial Bureau notes by the central bank 
notes at today's Treasury auc- said: "We are watching the mar- should help get the auctions off 
tion using dollars it has acen- ket and collecting necessary in- to a good start, 
undated through recent foreign formation from institutional to- The central »»m- 

exchange market intervention vestors every day but none of it *v e »i«>» non-com net! tiw bids 
operations. i, done <o Khiera. Rectal pur- 

A^niorBankofJwmoJB- nod «ra freooentl, pnrchraiM 


But i.pany institutions »d 

be done in line with the vestor8 »■» ***** *“*** Queries, wen. 


serves to foreign securities and 


^TS^tSSSSTS S tod^tretoeffectarequert 

Treasury market or the dollar." u» at least to- 


The Bank and the Ministry of ken buying at the auctions. 


ipanese institutional to- three and six-month bills as 
say that such queries, well." 

vere conducted before Some analysts said the bank 
he last two Treasury re- bought about gTOOm of the $lbn 
t, are in effect a request in three-year notes offered to 
y engage to at least to- May. 

Lug at the auctions. "Three- year notes are the 


Finance hove also been sound- The US Treasruy is scheduled best buy as we mostly hold US 
tog out investors about their in- to sell 933.751m of securities securities to maturity. So 10- 
tanttons at the auctions, but of- this week, starting with g8.75bn year notes and 30-year bonds do j 
ficials deny that this was aimrf of three-year notes today. not fit well into our portfolio,” 


Mr Hattie** s tat emen t under- 
lines the sensitivity et leading 
Eurobond market practitioners 
t* w or ries about the lack of dis- 
cipline ef the market. 

The Association «f Interna- 
tional Bond Dealers, the second- 
ary asarfat body, is seeking to be- 
eome a designated Investment 
exchange within London's regu- 
latory structure. But at the same 
time concerns abut the mar- 
kefs illiquidity have beea grow- 
fteg. 

■ IPMAls also considering ways 
•of bringing securities’ houses to- 
vrivemeat In the Euro equity 
market into its m em b er ship cri- 
teria. Currently, to obtain mem 
berabip a house must have ran 
the books on at least 12 bend fo- 
isaes over foe last two calendar 
(years. 


THE EUROPEAN Options Ex- 
change (EOE) plans to close a 
financially troubled market- 
maker it the firm h»i« to find 
fresh financing or close its 
risk positions within 10 days. 

Mr TJerk Westerterp, direc- 
tor of the Amsterdam-based 
EOS. yesterday said the firm 
had been given until Novem- 
ber 13 to wind down its risk 
positions to an acceptable 
Level or arrange for more 
credit The firm, which he de- 
dined to identify, has been 
refoaed additional financial 
gaara ntorw from one of the 
EOE clearing members which 
finances market-makers. 


Four other market-makers 
on the EOE are under trading 
restrictions which mean that 
no oew risk positions can be 
opened and existing ones can 
only be closed. All five mar- 
ket makers are- understood to 
operate mostly to stock op- 
tions and to a lesser extent to 
gold and silver contracts. 


T- nnt month’s stock market 
crash has strained the finan- 
cial resources of market mak- 
ers on the EOE and of hoek- 
man firms (jobbers) on the 
Amsterdam Stock Exchange - 
both big and smalL One of the 
largest hoekmon firms on the 


bourse, Mellegers and Van 
den EXsaker. was rescued by 
the leading options market- 
maker, Amsterdam Options 
Traders CAGT), last week jitter 
suffering a withdrawal of its 
credit 

Such a merger is a possible 
solution for the options mar- 
ket-maker given the 10 -day 
warning, Mr Westerterp said 

The EOE closed lower yes- 
terday in line with the decline 
on the equities market, 
prompting Mr Westerterp to 
summon the struggling mem- 
bers into his office during 
trading hours. 


FT INTERNATIONAL BOND SERVICE 


at stimulating buying. 


not fit well into our portfolio,” 


1CCH raises 


Listed are (to tatet I 


ten* lor nMdi there h m atequUa seemtey market. 


Chutes price dr Novrater 2 


One bond manager the the bank official said. 


"t ' , i" t| 


margins on 
ET-SE futures 


MNtPMMrSt 

American BratetE 






a subsidiary of 



BY STEptipEMnDLBt 


Esmark, Inc. 


MARGINS HAVE been in- 
creased by 50 per cent on fo* 
teres con tr a ct* sa foe Uni*- 
rial Ihnes-Stock Exchange 1M 
Index an the London Interna- 
tional Financial Futures Ex- 
change 

The derision, which boosts 
the initial maijj u on the con- 
tracts to £7,501 bum £5,060, 
was taken late last week to an- 
ticipation of possible volatility 

In the London sta c k market 
this week. 

It was taken by the Interna- 
tional Commodities Clearing 
Haase after consultation with 
Liffte, before the government 
decision nunonneed Thursday 


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has acquired 


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RepettoS.A. 


PFC venture 
in global asset 
management 


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ASerta393 

Mtaa &Lrtc0H94f 


By Hobart 


The undersigned assisted 
Esmark, (nc. in the negotiations. 


POWER FINANCIAL (PFC), 
the financial services ana u 
Power Corporation of Canada, 
has moved tote global asset 
ma n agemen t in Leaden sad 
plans shortly to announce a 
mer chan t banking venters in 


PF C has taken a 50J percent 
interest in HD Isteruiiosal, 
formed recently in Lendan 
with a 93 par cent stake held 


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James Heywerth-Duune and 
six ether international invest- 
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NM Rothschild, the Leudon 
merchant banking hsuae. 

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tog company fa whick PFC kas 
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Financial Times Tuesday November 3 1 987 

INTL. COMPANIES & FINANCE 


33 


Lucy Kellaway dn a Norwegian oil group’s plans to Iwiden its equity base 

issue 



BRITISH PETROLEUM'S un- 
derwriters are not the only ones 
to be faced with the problem of 
how to get rid of piles of stock 
purchased at distressingly high 
prices. In Oslo last week a 
mini-copy of the BP share issue 
was played out as Saga Petro- 
leum, one of the largest quoted 
companies in Norway, embark- 
ed on its own secondary offer- 
ing, with the target of transfer- 
ring 10 per cent of its equity 
from domestic. to international 
investors. 

The tour unhappy managers 
of the issue. Den norske Credit- 
bank, Wood Mackenzie. Morgan 
Guaranty and Finanshuset, 
have spent nearly NKrSOOm 
($7&2m) over the last fortnight 
in a fixed price tender tor the 
shares from Saga’s Norwegian 
investors. 

With the share price yester- 
day at NKrl 22 compared with a 
tender price of NKrlSO. they 
will tomorrow lock in a substan- 
tial loss when they announce 
the price at which the shares 
are to be sold. 

Were it not for the £aU in the 
market, the international issue 
of shares would have been a 
proud moment for Saga, mark- 
ing a new era of confidence. The 
company, which last year was in 
danger of being Norway’s most 


serious casualty of the oil price 
collapse, short of.cash and sur- 
rounded by potential predators, 
now has money in the bank and 
development projects on the ta- 
ble. 

Saga says it has become too 
big for the Oslo slock exchange. 
Not only is it often the most ac- 
tive share traded but its size - 
two weeks ago it.was worth al- 
most NKrSba- demanded a wid- 
er equity base. 

Earlier this year Saga got per- 
mission from' the Norwegian au- 
thorities to double its interna- 



tional shareholding which is 
now limited to a 20 per cent 
stake held by Volvo. The plan 
was to achieve this in part 
through an overseas secondary 
offering and in part through a 
new international convertible 
bond issue, expected to raise 
between NKrlOOm ' and 
NKrISOm. 

Both have been soured fay the 
toll in the market - Saga said 
last week that the convertible 
issue may be postponed until 


the markets recover their sta- 
bility. 

The company does not appear 

worried that all is sot going to 
plan. According to Hr Anders 
Utne, senior vice' president, its 
underlying strengths should be 
enough to tempt investors with 
an eye on the long term. More- 
over, the company can afford to 
wait for its cash. 

Last autumn San strength- 
ened its balance sheet with a 
NKrSOOm rights Issue and has 
recently renegotiated a $lbn 
Eurodollar facility. With cash 
balances of nearly NKr2bn at 
the half year, it has enough to 
finance most of its pending 
protects. 

But more than to its respect- 
able balance sheet, . Saga owes 
its new found health to the re- 
covery of the oil price from less 
than $10 last year. With prices 
now at $18 a barrel and appar- 
ently stable. Saga is presung 
ahead with Snorre, the first 
field which it la to operate it- 
self Saga attaches paramount 
importance to developing this 
700m barrel field, which it says 
will 'allow us to become a folly- 
fledged oil company.” 

Since its foundation in 1972, 
Saga has been the baby brother 
of the other two' Norwegian oil . 
companies, Statoil and Norsk 


Hydro. It was designed as a ve- 
hicle to allow non-oil Norwe- 
gian companies to invest in the - 
oil industry, and has thrived as 
a result of the Norwegian Gov- 
ernment's policy which has 
handed out favours with a view 
to building a strong and diversi- 
fied national energy sector. 

It is perhaps because of this 



special relationship with the 
Government that Saga feels con- 
fident that its Snorre project 
will not be forced to join a 
queue which is likely to be in- 
stituted for an new develop- 
ments. 

Much is at stake - if the proj- 
ect is delayed. Saga may have to 
lay off large numbers of its staff, 
half of whom are working on the 
project, and return to being a 
small partner in other compa- 
nies’ large ventures. 

However, these stakes are not 
j rnH gn i fi i»n nt «nH i in t en "* of re- 
serves, Saga is now larger than 
BritoU, the biggest UK oil inde- 
pendent .According to Wood 
Mackenzie, Saga has reserves of 
150 m tonnes of oil compared 


with some 124m tonnes attri- 
buted to BriloiL 

Due to its protected status at 
home, which has routinely se- 
cured Saga favourable treat- 
ment in Norwegian licensing 
rounds, growth prospects seem 
good. Unlike Its UK counter- 
parts, Saga has little incentive 
to enter the increasingly com- 
petitive international skirmish 
for oil exploration rights. 

While most UK oil indepen- 
dents are faced with falling pro- 
duction as all the big North Sea 
fields are kilning , Saga's pro- 
duction is on a steep incline, 
forecast to have risen five-fold 
between 1985 and the end of the 
decada 

As the large Troll field comes 
on stream, oil output will pro- 
gressively be replaced by gas. 
which promises to remain a ma- 
jor source of revenue for Saga 
m>n into the imt century. 

The comparative brightness 
of Saga’s prospects had not gone 
unnoticed on the Oslo market 
and since February the price 
has risen more than three-fold. 

However in the prevailing 
mood of stock market chaos 
where tomorrow is beyond the 
forecasting horizon of most 
market-makers, the prospect of 
gas revenues in ' the year 2000 
gives little scope for comfort 


Standard Chartered HK deal 


BY KEVM HAMLIN M HONG KONG 


STANDARD Chartered Asia, 
the merchant banking arm of 
Standard Chartered Bank, has 
agreed in principle to acquire a 
majority stake in Chintung 
Holdings, one of Hong Kong's 
biggest locally-owned stockbro- 
kers, in a move which under- 
lines a severe liquidity squeeze 
for the territory’s securities in- 
dustry in the wake of the market 
crash. 

The acquisition excludes 
Chintung’s futures trading -arm, 
one of the' most active operators 
on the local ftitures exchange. 
Chintung Holdings yesterday 
requested Chintung Futures’ 
suspension from the Arturos ex- 
change. 

Mr Charles Wrangham, Stan- 
dard Chartered Asia's manag- 
ing director, said the deal was 
swiftly concluded and. that it 
arose 'out of the aftermath of 
the fall of the stock market and 
problems in the ftrtureamax^ 
ket- 

The beleaguered ftitures ex- 
change was last week rescued 
fay a HK$4bn (US$512£m) life- 


boat fluid pieced together by 
the government and private fi- 
nancial concerns. 

. Following a dispute with the 
stock exchange over dishon- 
oured cheques, large foreign in- 
stitutions - now demand cash- 
based transactions from local 
brokers. . Chintung’s financial 
base was insufficient to provide 
cash payments for its large vol- 
ume of business. ■ 

Mr Arthur Lai, 
chief executive, said the 
ing of the bank would provide 
'comfort* for the company, and 
he thought a fresh capital injec- 
tion would not be necessary. 
"Everyone is stuck in this mad 
system at the moment and one 
wants to be prepared for the 
wont*- ■ 

Mr Wran gham said Standard 
Chartered Asia could not con- 
tribute to the solution of prob- 
lems facing Chintung Futures. 
Last week, 39 suspended fu- 
tures traders were served with 
writs fay the Futures Guarantee 
Corporation in an attempt tore- 


cover HK$L8bn. 

C hintun g Futures* voluntary 
suspension indicates that it has 
snfibred from the market’s 
steep decline. On fixtures trad- 
ing, Mr Lai added: *We don’t 
dunk it la viable for us to con- 
• tinue.” A statement issued earli- 
er, and then withdrawn, had 
suggested it was considering le- 
galaction against some of its fu- 
tures clients. 

' Standard Chartered is to ac- 
quire Ha majority stake for an 
undisclosed sum. Mr Lai, who 
founded Chintung ■ five years 
ago, retains a minority holding 
and will continue as its chief 
executive. Mr Wrangham said 
mdntnng would plug a gap in 
Standard Chartered Asia’s 
1 range of merchant hantiwg ser- 
vices. 

Chintung has overseas offices 
in i-onrfnti , Taipei, Singapore 
and Manila. It reported a profit 
of HKg&3m in the year to March 
and had been considering a 
public listing. 



:tW.. r.-.,-. j. 

BY BRU££JACQUE8M SYDNEY 


BRICK AND PIPE Industries, 
the Melbourne-based building 
products group in which CSR 
has amassed a stake, has pro- 
duced a flat result for the half- 
year to September. 

After-tax profit edged- up to 
A$4B7m (US$3L35m) from 
A$L95m on a marginal gain in 
sales to A$7fL6m from A$74.6m. 


-The interim dividend has been 
halved, to: 25 cents per share, 
but the overall payout is higher 
on increased capital. 

The company, which has u 
strong niche in the Victorian 
brick m a rk et; is yet to show any* 
benefits from Clifton Brick- 
Holdings, a former, rival which 




It acquired in August 
’A cashed-up CSR emerged 
late in October with a stake of 
about 17 per. cent In Brick and 
Pipe, taking advantage of the 
stock market crash. Mr Gene 
Herbert. CSR managing direc- 
tor, has said the company has no 
acquisition plans but may’ In- 
crease its stake farther. 


ANZ Bank opens Taipei office 


BY BOB KWQ M TMPEI 
ANZ Bank has opened a repre- 
sentative office in Taipei that 
will eventually be upgraded to 
replace the Taipei branch of 
Grindlays Bank, ANZ's British: 
subsidiary. ' 

ANZ is expecting to capitalise 
on the growing trade l inks be- 
tween Australia and Taiwan, 
and to attract Taiwanese invesfr- 
ment capital to Australia. Tai- 


wan’s exports to Australia were 
up 31 per cent to US$801. 7m for 
the first nine, months of this 
year, whil e its Imports rose 11 
per cent to $723. lm. 

: Because of Taiwanese bank- 
ing- regulations, ANZ cannot 
simply take over the licence of 
Grindlsys. It most operate a 
representative office ' for two 
years before an applying for a 


Axil licence. At that time, said 
Mr Reginald Nicolson, ANZ’s 
chief operating officer, the 
Grindlay's branch will be shot 

•We can derive more goodwill 
value with ANZ Bank using its 
own name for trading end mar- 
keting operations,* Mr Nicolson 
said. 

Taiwan currently has 33 for- 
eign banks. 




^ - 

. » - t Y- y 

■ ■ ■••* ✓- s y. 

*+ X' ,; 4 - 


- • -x . r ; -• 


This announcement appears as a matter of record only. 



Goodman Fielder Limited 

through its wholly owned guaranteed subsidiary 

Goodman Fielder Industries Ltd. 

£150,000,000 
Club Loan Facility 

Arranged by 

Banque Paribas 

Singapore Branch 
Funds provided by 


Ftip International Finance (Australia) Limited Tha Sanaa Bank limited 

C o mm o n wea lth Bank of H uff s - , . 

Banque Parfeas Belgique S.A. Benque Bnnnttes Lambert SX 

Generate Bank SAJNH KiedMhank NX. 

The Saftama Bank limited - Wtmfotehl BraikotAitstrafiaUmltod 
The MaubteM Bank Limited 


September 1987 


B\RIBAS 




Messina rights issue off 


BY JM JONES 04 JOHANNESBURG 


THE COLLAPSE of* Johannes- 
burg stock exchange prices has 
led Messina, the South African 
mining company, to defer its 
R62m ($30fon) rights issue 
which was announced only 
three weeks ago. 

The rights issue was designed 
to help finance the initial devel- 
opment of a new platinum mine 
and to free the company from 
restrictive borrowing covenants 
with its bankers. 


In a terse announcement, the 
company said that alternative 
funding had been arranged for 
the platinum venture’s initial 
development and the establish- 
ment of a pilot processing planL 
Messina extensive plati- 
num mineral rights in the South 
African Mmk L mmiImi H of Le- 
bowa. Exploratory drilling has 
indicated combined platinum 
group metal (PGM) grades of 
more than 6 grams per 


All these securities having been sold, this announcement appears as a matter of record only. 



Credit Lyonnais 

£75,000,000 

10V& per cent. Notes 1992 
Issue Price lOIVfe per cent. 


Kleinwort Benson Limited 
Bankers Trust International Limited 


Crddit Lyonnais 
Baring Brothers & Co., Limited 


Banque Bruxelles Lambert S.A. Generate Bank 

S.G. Warburg Securities Banque Internationale h Luxembourg SA 
Chase Investment Bank CL-Astaire & Co. Limited 

Commerzbank Aktiengesetlsehaft County NatWest Limited 

Credit Suisse First Boston Limited Daiwa Europe Limited 

EBC Amro Bank Limited Hambros Bank Limited 

LTCB International Limited Mitsubishi Finance International Limited 

Shearson Lehman Brothers Swiss Bank Corporation International 
International Limited 

Union Bank of Switzerland (Securities) Limited 
November 1987 











B Mios of 

equivalent in 

ajljkM a * T3T > Waul 
increase compared 

March 31, 1987 

Luxembourg francs 

Mios of USS 

to previous year 

Total Assets 

255,866 

6,856 

9% 

Customers’ Deposits 

148,968 

3,992 

9% 

Capital, Reserves and Borrowed Capital 


268 

15% 

Provisions 

11^61 

310 

15% 

Net profit 

829 

22 

16% 


Eurobond Issues: 

During fiscal year 1986-1987 
383 bond issues and private placements 
equivalent to USS 27 billion lead-managed 
or oo-managed by Kredietbank Interna- 
tional Group. 

105 bond issues in Luxembourg Francs 
lead-managed or co-managed by KBL. 

Euro-Equities Issues: 

Strong expansion of KBL’s activities in 
this fast growing market. 

Private Banking Services: 

Thanks to a dynamic multilingual staff 
and its expertise in private banking services 
since 1949, KBL has registered a substan- 
tial increase in customers, especially in the 
portfolio management services. 

listing on the Luxembourg 
StockExdtxnge; 

Over 1,600 securities issues already listed 
through KBL. 


Holding Companies: 

KBL is domiciling or rendering adminis- 
trative services to nearly 1,000 holding or 
other companies. 



•fyll'N;* 




Financial Se r v i cin g : 

KBL is acting as paying agent for over 
3,000 bond issues representing an equivalent 
amount of over USS 200 billion. 

Investment Funds: 

Specific administrative services for over 
65 investment funds provided by KBL’s 
special department. 

A Presence in the London Market: 
Through the acquisition in June 1986-of a 
major participation in Brown Shipley 
Holdings pie, London, KBL has intensified 
its presence in' the London market and 
increased its range of services and its 
client base. 

New Financial Instruments: 

Specialized services now available through 
KBL’s new department in swaps, futures 
and options, euronote and curocommcrcial 
paper. 


RqmouteOfllciK 

London- Maria Drabczynska 

Founders Court - Loth bray (3rd floor) 

London ECZR 7HE 

New Yodc Ofivicr Whnringer 

SSS Madison Avenue 

New Yoric, N.Y. 1 0022 

Tokyo: Jean-Franeob Caeymaex 

Kiosfai MiroLTBR Bnfldmg Suite 201 

10.2 Nsgztacho 2 chomc-Chiyoda-Kn 

Tokyo 1000 

' and Others in Melbourne, Hong Kong, 
Mexico, Pretoria and Madrid, 

Skier Boric 

Kradktbuk N.V. Dimrrikii 
7, rue d'Arenberg 
1000 Brussels 
Belgium 


KREDIETBANK 

S.A.LUXEMBOURGE01SE 

43, Boulevard Royal, L-2955 Luxembourg 
Phone 47971, Telex 3418 
member of the Almanij -Kredietbank Group 


A "private Banting” brochure which describes KBL’s wide range of services for private 
investors is available in English, French, Dutch and German on request addressed to 
KBL’s Marketing Department. 

The soisri report is available in EngEsh. French, Dutch and German on request addressed to 
KBL’s Documentation Department- 

An banned balance sheet and profit and loss acco un t have been pa Wished in the “Meroorial- 
Recudl SpAfai des Soa&£$ a Associations” of the Grand-Duchy of Luxembourg, 


Subsidiaries: 

KmHiHimlr (Stirae) &A, 
7, boulevard Georges-Favon 
CH- 121 1 Geneve 1! 
Switzerland 

KB faterentkual (Hoag Knag) LM 

I6/F The Bank of East Asia Building 
10, Des Voeux Road Central 
Hong Kong 

Associated Company: 
Brow* SUpky Bofafings pic 
Founders Court 
Lothbury 
London EC2R7HE 
United Kingdom 


* ■^. 4 *" 





Financial Times Tuesday November 3 1987 


Maxwell expands further 
both sides of Atlantic 

BY RAYMOND SHODDY 

Mr Robert Maxwell, chairman For a time it looked as tfLri- P S^ep» ^HiXaztaw! 

of Maxwell C omnunka tign Cor- broke was interested in KitS^esaod advertising in- 

poratlon, yesterday announced publishing into a new core pus*- Mr Maxwell'* fourth 

adou^ acquisition -the pm; Sess. Instead Mr State demded ^.SS^chaSta 

toaddDollYoniseltthroug g»g BiBBBBSiSB. 

jssarsssssss. 
SA'ttsffiSi 2s sstf assess 
“^S sssSs Jsrs^ssr^^s 

sources on torn core plants. This acquisition will po- 

. „ activities all of which are per- ^ as the nation’s second 

nal and Insurance News U> Fac- forming t largest commercial printer.' 

tmy Equipment News and Elec- bough t antoittal 75 per ceg**n- “jgJJrell already operated 10 

tronics Express. „ , teresUnOTPft>r£LlminM88. planta in different 

Earlier in the day Mrllaxwml ^ llaxwaU is paying £17.4m parts erf the UJSJjefhre yester- 

in cash for the L adb co ke's 79 day’s deal, 
per cent state in OTP, paying The publisher or Mirra* 

off about dim in inter-company Group Newspapers, wbo earlier 
debt with the balance going this year raised £630m in a 
mostly to Mr Brian Gil bert, rights issue during the aborted 
„ h as« managing director of UTP who attempt to take over publishers 
ration claimed the purena^ ofl per cent ofthe magazine Barcourt Brace Jovanovich, is 

made it the *«*>ndfargest com- SSreT S^^eved to be in negotia- 

mercial printer i®** ff™P SSD “ tions with a large American 

nritr^lh^^Jnited Mr Gilbert and his existing di* publishing compare. 

mate the rectors will continue to ran Mr Maxwell wM recently id 
^*>5! J^^TorMrStein UTP under Hr Maxwell’s own- the deal went through it would 
Shfr b.htotog atafcwwr -to 

Sound Diffusion fails 88% 


a aouue acquisition -me pur- 
chase of a chain of 39 trade and 
technical magazines from Mr 
Cyril Stein's Lsdbrote Group tor 
£3&8m and the purchase of his 
fourth XL&. printing company. 

-Under the Ladbroke deal fin- 
alised yesterday afternoon. Hr 
Maxwell now owns magazines 
ranging from Architect's Jour* 
nni and Insurance News to Fac- 


announced he had bought for 
cash Alco Gravure, a New Jer- 
sey printer with six plants 
across the US, annual sales of 
$150m and 1400 employees. 
jfaxweH Communication Corpo- 
ration claimed the purchase 


BYPMUPCOGGAN 

Sound intrusion, electrical 
equipment leasing group, had 
more bad news tor ite sbare- 
holders yesterday - feat half 
pre-tax profits were down 88 
per cent at £268,000 (£Z2?m>. 

Once a gain- the company an- 
nounced its figures late in the 
day. The first report appeared 
on TOPIC, the Stock Exchange’s 
screen information system, at 
5.06 pm and no one at the com- 
pany was available to comment. 

Last month, Sound Diffusion 
announced its long-delayed au- 
dited figures for 1986 which 
were 43 per cent lower than the 
unaudited figures it had an- 
nounced in June. Auditor Ernst 
Whinney insisted that the 


broker after Sheppards A Chase there would be good commer- 
resigned In June. rial logic for a ssige*- The two 

Mr Paul Stonor, chairman, companies are still having ois- 

gaid in the company's brief- cessions. , — 

statement yesterday that the The first half reduced proto 
poor results reflected toe tin- were reportedon jjtfdty in- 
certainiy felt by staff and cos- creased turnover of £19JMm 
tomersalite about the fixture of <£l7.72mX Earni^s pershare 
the group. "These feelings of un- were down at CL19pCL69pj. 
certainty," tha <faitement said. 


toe statement 

"have been created as a result l_ 
a group of dissident sharehold- 
0rs circularising the Press with 
rumours of impending takeover 
bids and other unsettling misin- 
formation. 1 * .. , 

The statement added: TSnen 
a -period free from the recent 
flow of unsubstantiated com- 
ment the morale of the compa- 


& wxunney umauw u*« — - — -- —/ r .Tfu 

co mpan y tate a more cautious ay’s staff and customers could 
approach to toe recognition of be quicMyres tored. 

leasing profits. One takeover rumour whirls 

At theawmal meeting held on substantiated Js the poxaMBy 


Thursday, Ernst & Whinney re- 
signed and Arthur Young will 
be this year's auditors. The 
company is still without a stock- 


(UMMUiuaicu » . ■ 

of a bid from Tunstall Telecom, 
security equipment company, 
which has a 49 per cent stake. 
At toe AGM, Mr Stonor said 


Management buys Microlease 


Directors in Mcrdemf USM- 
quoted electronic equipment 
lojaing company, have rao- 
in taking the company 

r way of a management 
out They will announce this 


morning that shareholders with 
more than 90 per cent of the 
company’s equity have accepted 
toe oilier from a private compe- 
ls set up far the purposes ofthe 
buyout 


•comment 

No doubt there aragood rea- 
sons why Sound Diffusion did 
not report these results at Us 
AGM on Thursday; no doubu 
there are good reasons why It; 
released these figures solute to 
toe day. However, it is difficult 
to *»h» on faith a company 
which has toiled to meet its 
forecasts so often and is so fre- 
quently unavailable for com- 
ment Mr Stoaort rititude 
seems to be that be is the only 
one to step; Ernst to Whinney u 
wrong, Sheppards to (toase is 
wrong; toe dissident sharehold- 
ers are wrong. This attitude 
might be understandable in the 
chairman of a go-ahead con™- 1 
ny, but not of one which 
seen a profits drop of 88 pen 
cent Shareholders who bom 
ported him last week maywejll 
now be hoping that TtotstaUffl 

takeover interest is sustained. 


Rights issue 
flops now 
begin to 
materialise 

Bynunut 

The collapsing ft ne taw nfat 

laheed its first under rights 
casatty yesterday, mi the 
MiSM caU fty T Cowie, the 
Sunderland-based meter dis- 
tributor, closed with minimal 

take-up from slunrelHddura. 

A preeise figure tor the nam- 
bor oT rinses appited tor wUl 
be pabUshed at 8 am this 
morning. However, Noble 
Grossaxt, Cowles advlsan and 
underwriters on the issue. said 
yesterday that they believed 
the amount would be under S 
per cent «T the new shares. 

The rights issue flap has 
been inevitable given the se- 
vere downturn to share prices. 
The new Cowie shares were be- 
ing offered to shareholders at 
lS9p - a tolxiy hefly M per cent 
discount to the 19fp share 
price ruling ahead of the 
rights announcement In late- 
September. However, Cowie 

shares -high-fliers lathe non-: 
mar's boll market and showing- 
a quadrupling la price since] 
fl^begtonlng M4M7-^haw^ 


ANY NEWS — 

day Harris looks at ABF’s opflons.over its bid for Berisford 

Keeping tabs on the escape routes 

- am- icharm 


amongst 

verdy hit In the neat cel- 
IhmT Yesterday, they eased 4p 
kdmdlftp. . .. 1 

Cowie, however, was not the 
only casutty; two smaB proper- 
ty companies also suffered. 
New England Properties saw. 
only 47 per cent of its BLln 
issue taken up. While Helical 
Bar reported teat only 2 
cent of its £ttJhu 
■Reference share 
clawed hack by 

holders .under . . 

provision. Bex WflHams, the 


iTED BRITISH Foods 

have cold feet over a cash 

bid for StoW Bexisford which 
looks increasingly expensive in 
the light of the market crash, 
bat its possible escape routes 
areunlitely to Involve dipping 
its toe into new waters. 

The most likely outcome, that 
ABF wfll pull out on Thursday 
if it tolls to reach 90 per cent 
rtanees, haa a distin- 
0 ed but not altogether hap- 

py precedent In June 1985, the 
specially created Bristow Ro- 
torcraft withdrew its bid for 
Westland, the helicopter com- 
pany, despite gaining the sup- 
■ of 57.7 per cent of share- 


Profits top £82m at six months 


unooker group, bred mud hap- 
pily, sering tkms* 83 per cent 
Sfitx EUm ash callat 48p 

fal— OJ L 

Later this week, more vic- 
tims laek lOdey amongst 
those dosing over the next 
days are Lodbiote's ItS lai call 
and Ktehnmrt Benson’s £1 
rights. 


Thlrtf Mile ahead 

Taxable profits ef Third Hie 
Investment, special situati on . 


doubled to £24X4*2 In the 
hatf-year- to end-JIuue 1987^ 
ISWBP tWIMHPOT ^bkWCNl ft Cftlft^* 

parable increase to 2Llln 
0799,720. 

Alter tax rtmmiwm* 
eomiiigs per share came out at 
74p aguinri 4J9p last time. 
The interim dMdond Is cateod 
tauespcue. 




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Bristow claimed that it had 
discovered a more serious fi- 
nancial situation at Westland 
than it had expected. The with- 
drawal was a prelude to the bit- 
ter industrial and political fight 
over Westland the following 
winter. 

But assuming that the bid pro- 
ceeds beyond Thursday, the ad- 
journment of today’s extraordi- 
nary general meeting gives ABF 
another escape clause - and in- 
deed a one-way bet, as Beris- 
ford’s advisers were pointing 
out last night 

Even on the s alitely possUm- 

y that 100 per cent ofBerisford 

_ lareholders accept the cteh 
offer - which yesterday was 
worth 27 per cent more than 


Associated British Foods, 
the *»n«"g and baking group 
bidding ftr SAW Bensford, In- 
creased Interim pre-tax Prrilte 
to 288.7m, an improvement or 
145 per cent over last time’s 
£72JEm, but earnings per share 

were unchanged at U4p. 

The xesrite were betow son» 
market expectations. ABF 
shares, which had been bail- 
ing above Friday's dose even 
after tike company’s separate 
a nm u m cemant about the Her- 
isfoidbid.lostl4pte290p. _ 

. ExclEiJa# ABF ■ Invest- 
moits, which the group sold in 
June 1988, pre-tax prem ise 
by 20.7 per cent to gft to 
(EfZJnl in the six months to 
September 26. On the m»e te- 
sts, turnover rase by about 6 
- per cent to £U)7bB (£1.01bH). 


Inresfxaent income of £31Bm 
compared with th e £304 tria l, 
including ABF I™*®™ 1 * 
nrollts, last year. The total tax 

Sarpe rase to 2303 m 

The interim dividend to to 


ABF said that Us 
n&cturing divisMMis had made 
a start to the year, 

ami good progress continued to 
lie reported from some mailer 

cammnles op er ati ng in more 
recently developed areas, in- 
cluding food Ingredients, 
starch and from food. 

Although it was c onfi d e n t 
flat trading divisions in the 
UK and overseas would in- 
crease profits, ABF said It was 
difficult to mate any forecast 
nntfl the outcome ofthe Beris- 
fordWdri ■ 


BerisfortTs market price - ABF 
cannot complete the bid- until 
its own shareholders approve. 

It has given Itself another 
three weeks to watch the mar- 
ket price and - indeed - to dis- 
cover more about Berisford, 
which has premised to produce 
■ a 1988-87 profits estimate by 
mid-November. It still could 
walk away, citing "adverse -ma- 
terial c ha nge 1 * or directors’ fidu- 


ciary duties as TI Group did last 
week when it _ dropped an 
agreed US acquisition. 

‘ An illustration of the sort of 
chang e which could be cited as 
'material' was the delay an- 
nounced- earlier yesterday in 
completion of Berisford s co- 
coa-processing Jo™* to™* 
with WJL Grace of the US at 
least until November 20. 
limits on the price at which 


f ffgwi in Berisford shares will be 
issued to Grace inj partial jwy. 
ment were removed and either 
party wffl be free not to proceed 
with the deaL _ _ . 

ABFs decision leaves Beris- 
ford shareholders in a quanda- 
rv. If they tender their shares to 
ABF this week, and the offer is 
then withdrawn, they .will not 
have possession of their shares 
to be able to respond to suhse- 
anent price movements. Beris- 
ford last night was preparing to 
complain to the Takeover Pan- 

**bne prospect probably not 
available to ABF is to reduce Us 
offer price This was allowed m 
February, when APV Holdings 
and Baker Perkins, the engi- 
neering companies, adjusted 
the terms of their agreed merg- 
er after the latter discovered 
unexpected cost overruns in 
one of its food machinery divi- 
sions. 

But the panel would not coun- 
tenance a reduced offer unless 
ABF and Berisford jointly ap- 
proached it If ABF withdraws 
the current bid, it will have to 
wait another 12 months to try 
again. Much depends on wheth- 
erMr Garry Weston is willing to 
nay the current price to get his 
hands on British Sugar now or 
wait a year on the chance he 
will get it cheaper. 

See Lex 


Acquisitions boost Burgess to £8.23m 

. . .. . aTmam than OblL SCO. the SfUirBS rC 


BOOSTED BY 
gessGrcup, Hii 

doted electronics company, re- 


“-■S saaffWaiS •SSsESffitea 

merger with AEC provided in- 


creased manufacturing and 
technological . resources and 
new products which would en- 
sure organic growth for the 
foreseeable future. 

He added that the new auto- 
. mated assembly line for micro- 
switches in Gateshead was com- 
plete and planne d au tomation 
of assembly in the UK and Gen- 


ported record profits for the 
year to August 1 1987. The pres- 
ent year has started with strong 
order books and farther growth 
is expected. 

On turnover up 89 percent to 
274.05m. against an adjusted 
fMff qam pre-tax profits rose 36 
per cent from £6- 07m to £8-23 m . 

^Electronic Components. ac- Jl 

i*B*.* Mu a*aaBaa 

gsgaaraagg ss^Ssssss 

increased ditions. Resources would be 

°^^MOTton raid tlmt the com- 
wiML It Bob pawtodumuedbomwTOgfo- 


view the microewitch dirimon 
increased trading and mofits by 
about 20 per cent with sales to 
the German automotive indus- 
try at record levels. The North 
American businesses improved 
despite intense competition 
and the rising pound, said Mr 

Morton. 

The coin validation offshoot 

recent product development, 

•comment 

Stripping out the £3m contri- 
bution from file merger-ac- 
counted ABC, yesterday’s fig- 
ures from Burgess were exactly 
in fine with the forecast of £5m 
mre-tax profits made at the time 
of the merger. When the fore- 
cast was made, only six weeks 


ago, the shares rose 30p to 372p- 

but that was on the other side of 
the market crash, and yesterday 
the shares edged 5p down - to 
fli ftp with a third of its turnover 
coming from the US as a result 
of the AEC deal, Burgess has 
been exposed to the fall brunt 
of anti-US sentiment However, 
the reasons for the merger re- 
main as compelling as ever - to 
place Saia and Burgess prod- 
ucts in hitherto untapped US 
markets, and AEC products m 
European markets, and the der- 
ating seems unjustified. As the 

asussf* 

tic, synergistic benefits should 
outweigh a fall in the dollar, 
even a shrinking US economy. If 
the fast-growing Burgess mates 
figm in the current year, the 
shares are on an und e m an di n g 
prospective p/e of 9%. 


Blue Arrow buying BPS 

Blue Anew, the employment tore of cash and shares. 
agency which recently trebled Last year IPS made pre-tax 
its size through the gLSbn ac- ptpfits of £181,000 on turnover 
qniaiHan ofthe US group Man- oT£L38m and extra consider- 
Dover, to buying recruitment ation will be parable depen- 
. agency IFSfora combination of dentonfatuxe profits. 

■hare* and cosh, * •.'- Tte shafre price of Blue Ar- 

xbw’ has suffered more than 
IPS epedalisea m providing jj, recent months as the 
pennammt and temporary per- market has absorbed a ffve-for- 
’ iterance mans- two riehts issue and the imnact 


Chase confirms writs 

CHASE MANHATTAN Securi- that the shares were subse- 
ties confirmed yesterday that quenfly sold and end ed u p. at 
writs had been issued against Chase Manhattan Securities, 
Hr Ivor Goodman, former chair- broker to Unlgroup, just prior 
mart of Vaipuv, the timber, . to -a scheduled release of the 
building and ' clothing group, - -company’s profit figures, 
and Linda Fitzgerald,, ql- ' - 


sonnel to the insurance 

try. It is' costing Blue Arrow 
rather less than xts US acquisi- 
tion - the i nitial consideration 
will be just £SMM»0 in a mix- 


THE USM-quoted Swindon Pri- 
vate Hospital is now consistent 
Jy achieving profitable levels ox 
occupancy, the board said yes- 
terday as the company an- 
nounced Increased pre-tax prof- 
its of £156,000 for the yearto 
July 31 1987 compared with 
£46,00) m tte prCTtousyw. 

Turnover was 21 . 88m (£Lfi3m) 
.with- gross profit at £918,000 


two rights Issue and the impact 
of October’s crash. Yesterday, it 
closed at 104p, compared with 
the 22?.5p It touched earlier 
this year. 


Swindon Hospital rises 


fleging breaches of imddcsrtnd- 
ing rales, conspiracy and 'inis* 
representation, and c laimin g 
damages- 

The writ, seeking an Ixquxic- 
tion against the defendants, re- 
lates to allegatiofls that Mr 
Goodman gave his Unlgroup 
shares to Mi as Fitzgerald, and 


(£82ftJX»). 

came to £605,000 (£S68flOO), tfh- 
er operating income £13,000^ 
<nfl) and interest payable 
8170,000 (£210^)00). Tax accounlr 
ed for £354)00 (nil). 

While thei board does not an- 
ticipate dramatic Increases in 
profitability in the fixture, it is 
confident of continuing satisfac-j 
toxy progress. . 


Bridgend sees recovery 


MR NEIL LIST, chairman ofthe 
Bridgend Group, told sharehold- 
ers yesterday that the recon- 
struction programme undertak- 
en to restore profitability and 
the company’s flnan- 
was well ad- 


improve 
dal po 


van 

He said the last few months 
bad seen the planned reorgani- 
sation which would enable 
Bridgend to discontinue all mo- 
tor distribution activities and 
concentrate on the profitable 

security and electrical whole- 
saling businesses and strength- 
en its balance sheet materially. 

For the six months to end- 


June 1987, turnover declined to 
EHMffim C£17.05m). At the pre- 
tax level profits totalled 
£120,000 against £130,000 at the 
half-way stage last year. Howev- 
er, the second six months of 
1986 saw the group run up a loss 
of £488,000. 

First half earnings worked 
through at a same-again 0.84p 
and the interim dividend is 
maintained atOJp. 

The group has entered an 
agreement with Leyland-DAF 
which will 
nation 


result in the termi- 

at the end of this month 


of its two remaining commer- 
cial franchises in the 
north-west 


'-Stock exchange rules prohibit 
directors item dealing in shares 
of a company for two months 
prior to publication of results. 

The Injunction would restrain 
the defendants from acting to 
complete sale of the Unlgroup 
shares to Chase Manhattan Se- 
curities. 


Cray in £8m acquisition 


BY CLAY HARRIS 
Cray Electronic xtbldings, the 
defence and telecommunica- 
tions contractor's to pay up to 
aim for Lloyd Instruments, a 
manufa cturer of materi ala-test- 
ing and electrical teachi n g ma- 
chines.' 

In the year to April 30, Lloyd 
reported group pretax profits 
of £44*386 on turnover of about 
£6m. This reflected, however, 


changes at the company after 
the management buy-in. The un- 
derlying level of profits is be- 
lieved to be closer to E500.000L 

j Cray will pay an initial £5.65m 
lin cash and about £300,000 in 
' shares. Additionally, up to 1 
£2.06m in shares will be issued 
based on profits in the three 
years to April 1990. 


DIVIDENDS ANNOUNCED 



Date 

Corres - 

Total 

Total 

Current 

of 

ponding 

for 

last 

payment payment 

div 

year 

year 

SL5 

Feb 29 

2.2 

_ 

V3 

0.2 

Jan 12 

0^ 

- 

0^ 

2L38t 


2 

3.13 

2J5 

2.64 

Jan 11 

2.3 


5.75 

. 2 


2t 

« 

1Z25I 

; 1% 

Dec 29 
Dec 2 

3JS* 

1 

- 

7ST 

3 

0.8 

Dec 15 

0.75* 


22 

; L25 

Jan 3 

- 

- 

1.15 


Ass. Brit. F»ofa.....i nt 

Bridgend int 

Burgess Group .— fin 
Celeron .... ..... int 

Craig & Rose—— — tilt 
H- ating Assocd. _int 

Third MBe int 

TR Industrial —.—.int 
Unit Group0 int 

Dividends shown pence per share net except where otherwise 
stated. *Equivalent after allowing for scrip issue, ton capital in- 
creased fay rights and/or acquisition issues. SUSM stock. 5Un- 
quoted stock. 0Third market ^Corrected to reflect scrip 
adjustment 4Carxies scrip option. *F£nal not less than L45p fore* 
Least 


Abaco acquisitions policy 


BY STEVEN BUTLER 

tint TEU Bacall, chairman of 
the fastgrowing financial ser- 
vices group Abaco, told share- 
holders at the company’s annu- 
al general meeting that the 
underlying profitability of Aba- 
Go’s business would be unaffect- 
ed by the crash of the .stock mais 


fcet 

The company’s shares have 
fallen from a peak of 123p on 
October 8, to 68p yesterday. The 
price, however, had been run 
up sharply since mid-August 
and the shares are still above 
the year’s low of 58^p. 


Company news In brief 


(SAIGA BOSE (paint mater) 
made turnover of £Z33m in first 

half of 1987 (£2.44m) and pre-tax 

profit EBijOOO <&&&*&■ Earnmgi 
share 62p (8-2p) mid interim 
adjusting for 


AABhas acquired JMF Sup- 
plies for £L88m, of which £L7m 
has been satisfied by the issue 
to the vendors of 485,718 AAH 
ordinary shares and the bal- 
f ance in cash. 


GENERAL Invest- 

Trust-Whoily owned sab- 

gidlary. Broad Street Invest- 
ments Uersey) has sold the 
freefadd properties rt 19 and 21 
Broad Stoee t, St Helier for 

gTOMi , 

UNTIED NEW8FAFEB8 subsldr 
laxy Morgan Grampian has paid 
gg-gm cash for Dewberry Publi- 
cation Services which publishes 
Catering, a mniQily magazin e. 
AtooUS tebaidimy PSNPuWi- 
cations has paid $L^n for 
■ monthly trade magazine Televi- 
sion Broadcast 


SABRE VH Limited 
U.S.S50, 000,000 

lliiUtinffTi numrtrinlrirrtw 1TTT 
For the 6 months period 29th 
October, 1987 to 29th April, 
1988 the Notes will bear the 
rate of interest at 8.125% 
per annum. US$41 ,302.08 
wiQ be payable from 29th 



US$1, 

amount of Notes. 

T'T — rr’-f-rt 


Knight Frank 
& Rutley 


Hudson Conway 

have invested £20 million in 

Sibec Developments Ltd 

in return fbr an initial 
43% equity dim 


JTnffitf Rank A Rutley introduced the parties and 
provided va lu at io n advice to Hudson Gonvray 


20 Hanover Square 01-629 8171 

London WIR QAH Telex 265384 


jjT 


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f :-- 


« >' - . - ‘ .•!— . 
*- VV 

*«*■- . .. ■ T, .. f 

**►•.. * ’■' ; 






.<#;*’ ■ 
+ •• \ , 

14 








8.23m 


• .. 

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ms w rits 


a - 


... li ‘sf.-r: *■_ 


. ..... 


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Jit]: 


acquism 







IJU!!* 


r 






Financial Times Tuesday November 3 1987 


35 


UK COMPANY NEWS 


Coloroll surges: expansion halted 


BY nONA THOMPSON 

_ Coloroll, th* acquisitive nod 
East-growing home furnishii 


Croup, yesterday reported 
year profits more than trebled 
and a complete halt on farther 

expansion in the aftermath of 

the stock market crash. 

For the six months to Septem- 
ber 30, 1887, the company' made 
pre-tax profits of £LL2m, 
: fXSta, on sales strongly 
at £324.4x0, compared 
with £44. 4m in the same period 
last year. 

"Last Friday we ripped up our 
strategic plans and prepared a 
new action plan for the next 18 
months,” Hr John Ashcroft, the 
chairman and chief executive 
said. 

"The whistle has gone on ac- 
tions. We- are extremely 
i that wo have a low ex- 


posure to the US - less than 20 
per centof sales and profits. ” 

The company wtlf now con- 
centrate on building up its ex- 
isting activities - "we plan to 
eliminate gearing In the next 12 
months* - and is switching away 
from its previous emphasis on 
building strategic stakes In 
ho me farthing* businesses in 
the UK and US. 

Coloroll has set aside £4. 67m 
against anticipated losses in the 
value of holdings it has in take- 
over targets, especially in the 
US, though Mr Ashcroft said 
these were hot realised losses 
and the' extent' of the 
write-down had been "very, very 
conservative." 

A large part of the strong 
growth shown in the six months' 
was due to acquisitions, UK 


wallcoverings alone of the five 
main divisions showing no pur- 
chases 

An exceptional credit of 
£834^)00 was due to property de- 
velopment profits. An £878,000 
extraordinary debit comprised 
the £3. 79m gain arising from dis- 
posal of the packaging division 
less the £4-67m provision for an- 
ticipated losses on quoted in- 
vestments. 

Earnings per share rose to 
&3 p from Up and an interim 
dividend of 2.64p G2-3p) is being 
paid. 

•comment 

John Ashcroft said recently 
Coloroll’s loagpterss objective 
was for a UK/US axis with up to 
40 per cent of earnings coming 


from North America. The past 
two weeks have turned that pol- 
icy on its bead. The company 
has shelved much-hinted-at 
plans for a big US acquisition 
and overnight changed its stra- 
tegic (dan to one of organic 
growth, gaining praise for mov- 
ing so quickly. While yester- 
day’s figures were ahead of ex- 
pectations - the company is 
increasing its market share and 
is clearly getting to grips with 

the businesses acquired in 

terms of boosting sales - acqui- 
sitions have been a crucial part 
of growth, and if inhibited, 
growth will probably slow. The 
shares closed lp off yesterday 
at 229p. Assuming pre-tax prof- 
its for the foil year of £28m, that 
puts them on a prospective p/e 
of about 11. 


TRIG -happy’ with UK bias 


BYNUCK3TAJT 

TR Industrial and General 
Trust, the largest investment 
trust in the U-strong Touche 
R e mn a nt stable, yesterday re- 
ported a ]&2 per cent increase 
in net asset backing during the 
six months to end-September, at 
178.6pashare. 

That figure has been overtak- 
en by market events since the 
half-year end. However, the 
company added yesterday that 
the trust increased its UK expo- 
sure during the period and 
about 60 per cent of assets in- 
vested in the domestic market 
Another 20 pear cent was held in 
the States with 10 per cent in 
Europe and a farther 10 per 
cent in Japan. Hong Kong ac- 
counted for les than 1 per cent 
of assets. 

Interim figures showed an in- 
crease in total revenue from 


£9.72m to £11. 79m. But a jump in 
debenture interest from 
£250,000- to £7. 85m left revenue 
before tax little changed at 
£?.78m(£7-58m)- 

The interim dividend goes up 
from (L75p.to 0.8p and the com- 
pany forecasts a final of not less 
than l~45p, the amount paid in 
the year to March 1887. 

•comment 

Wood Mackenzie estimates 
for current nay at TR Industrial 
and General suggest around 
131 p a share. If so, the discount 
has now widened to 17.5 per’, 
cent - compared with as little 8 1 
per cent in the wake of rumours 
that Mr Robert Maxwell 
planned to use the trust as a ve- 
hicle for a disguised rights is- 
sue and 82 per cent immediate- 


ly ahead of Black Monday. The 
current figure is slightly below 
discount for the non-specialist 
investment trusts overall, and 
some 4 percentage points lower 
than the discount at other large 
general funds - Globe, for exam- 
ple. The better rating, however, 
can be amply justified by recent 
Coal Board Pension Fund pur- 
chasing - nudging its stake over 
27 per cent - and oy the current 
situation surrounding Touche 
Remnant and Its various trusts. 
Certainly, the portfolio itself 
looks as soundly-based as any -■ 
given the circumstances. 


Ransomes’ £3. 8 m sale 


BY PHILIP COGGAN 

Ransomes Sims and Jefferies, 
the lawnmower manufacturer, 
is selling its form machinery 
business to Electrolux, the 
Swedish white goods group, for 
£3.8meash. 

The divestment follows years 
of declining profits at the sub- 
sidiary, reflecting the problems 
of the agricultural sector. RSJ 
said that the division had not 
made an adequate re tur n for 
some time and was expected To 
make a small loss this year. . 


RSJ-will continue to manufac- 
ture the machinery on behalf of 
Electrolux for a two year transi- 
tional period, until .December 
1888 when the Swedish group 
wiH. assume J'esponsibility for 
manirftwhrr p The transition 
will allow RSJ to redeploy its 
manufacturing resources. ■ . 

Nevertheless, a write-down of 
stock and expected reorganisa- 
tion costs win mean that the net 
effect of the sale will be a £2£m 
extraordinary charge in RSI's 
1987. accounts. 


EOT postpones market launch 

BY DAVID THOMAS' , '■ 


- ECT Cellular, the first g p wp 
aiming for a notation- on the 
hack of the booming ^dlu- 
Tar telephone market, has had 
to postpone its plans because of 
the stock market crash. 

ECT, a London-based cellular 
equipment and serviceprovid- 
er, intended to join the USM lat- 
er this month by floating- 15 per 
cent of the company to raise 
£4m. 

However, Mr Marc Albert, 
ECT managing director who at 
present owns 85 per cent of the 
company, -said the stock- m arket 
crash would almost certainly 


force a postponement of thp flo- 
jiatioh .until the .first quarter of 
~nextyead V. > . 

The company remains com- 
mitted -to seeking a flotation in 
order to fluid expansion plans, 
including the acquisition of 
smaller cellular service provid- 
ers. Previous acquisitions have 
helped ECTboost its cellular 
subscriber base to about 10,000. 

. The group is forecasting prof 
its of £L5-£L6m on sales of £18- 
£2Qm in the year ending .March 
1988 and profits of £2-£2~fin-on 
turnover of £3fo£35m in the M- 
lo wing year. 


Ests & Gen sells 
housebuilder 

Estates and General Invest- 
ments has made a Elm profit on] 
‘the disposal of the house build-] 
ling business it acquired ini 
I Starch as part of its £3.7m pur-] 
[chase of Site Improvements. 

Yesterday, Estates an- 
nounced that it had secured 
JEAlm from the sale of Site De- 
velopments, the housebuilding 
company, to McHawfc, a compa- 
ny owned jointly by Speyhawk 
and Alfred McAlpixte Homes. 

Estates bought Site Improve- 
ments principally for its £8Jtan 
commercial property portfolio. 


TRNRand 
Platou still 
talking on 
assets value 

By MSw Smith 

TR Natural Resources, a 
Tsuche Remnant investment 
trust, said yester da y that It had 
failed to reach a g re ement on a 
Formula Asset Value for Its 
shares with Platon, the Nenre- 
glam company which last 
month wen a bid for esn tool of 
the trust 

The two companies had 
hoped to agree on an FAV by 
last Saturday, a fortnight after 
the bid was declared nncondi- 
tkmal as to acceptances. Pla- 
ton said, how e ve r ; that it w» 
Hcrirfng more information on 
the trust’s unquoted Invest- 
ments, "one or two of which 
took a trit expensive.” 

’ Beth It and TRNR expect to 
reach a deal by the end of this 

week. The gap between their 
figures Is less than Vfep, with 
Platen's "provisional caJeula- 
tfen” at imilp and XBNR’s es- 
timate at UAMp. 

On the basis ofTUtou’s esti- 
mate TBNR shareholders who 
accented the cash offer would 
be entitled to IMbfetpftnr each 
share. Those wboaeceptedthe 
share offer wuuH^feAiitiJSMl to 
three new Pteteta shares and 
£22741 In cash for every MM 
TBNR. 

Following the claee ef the of- 
fer last Saturday, Platon will 
control S2J7 per cent ef Che 
trust 


Hunting Inds. sustains 
growth with £7m midway 


THE FORECAST of further 
profit growth at Hunting Associ- 
ated Industries is being met 
with an upsurge from £4m to 
£7.13ra at the pre-tax level for 
the first half of 1987. 

And the second half looked 
promising, the directors stated. 
Results should show an im- 
provement over the first half 
helped to a small extent by con- 
tribution from Metair Aircraft 
Equipment, acquired in June.. 
The 1986 group profit was 
j£lL8m. 

Basic earnings worked 
through at 28.4p (15.3p) and fully 
i diluted at 22. 9p (13. lp). The di- 
rectors are confident that the 
year’s dividend will be main- 
Itained at 9p on capital in- 
i creased by the l-for-4 scrip, and 
'the interim rate is again 4p-an 
j effective rise of0J3p-and carries 
ia scrip option. 

j Turnover in the half year rose 

■12.4 per cent to £166m, and trad- 
ing profit increased 32 per cent 
i to £7m. This was backed up by a 


substantial cut in interest 
charges to £665,000 (£2.1m), 
helping to push up the pre-tax 
profit by 77 per cent 

Growth in turnover arose in 
the defence and engineering ac- 
tivities. Profitability also con- 
tinued to increase, partly 
reflecting significantly lower 
development cost write-offs. 

Aviation support businesses 
in the UK, Canada and South 
Africa all increased their con- 
tributions. 

Profits were now being earn- 
ed by Hunting Technical Ser- 
vices, while the Leach Group 
continued with its worthwhile 
contribution, resulting in a 
profit from the resource survey 
and photography business area, 
compared to significant losses 
last year. 

In the composite busi- 
nessjiowever, a loss was suf- 
fered. There were reduced op- 
portunities in the Middle East 
and a turndown in the UK, cou- 


BOARD MEETINGS 


UKwrina eon*Mnto ten notified dm ot 

d m eetings to me stock Exchange. Such 

Unge m usuaBy held for me pivDose of con- 
BkJartng cflvidonda. OKfcM hxflcnllona vb not 

awaiiffiSfe as to whether the dvkkwoe are Interims 

or tools end the sob-dMt*r* shown below a ie 
based mem* on last year's ometabtes. 

TODAY 

Mertmf- Hembras fmeenenf Trust. York 
Mount 

j^eis-C w i M t u n^Woaaheugh. 


ASanOc Resoutcoe . 


EHt&C .... _ 

External Investment Tst . 
Gievee. 


□feat Portend EstMos . . 
Oxford kWnmrde . „ 


nmme dates 


Amber mdueaial . 


irnwfnmentPnxkjcUon . 

Sonxcee . 

Northern American Trust ^ 

Tomunsone- ... 

Now 5 UDOHoktogs 


Now 4 
Nov 13 
NOtf 11 
NOV 11 
Nov 5 
Nov 11 
Nov 12 


Nee 12 

" Nov 9 
Now 24 
Nov 17 
Nov 9 


pled with additional investment 

in new product areas. 

•comment 

With the JP233 contract un- 
derway and the anti-tank sys- 
tem set to come on stream next 

S ar, Hunting has secured its 
tore for the next few years 
and Mn afford to view the ups 
and downs of its other divisions 
with equanimity. Down pay- 
ments on the JP233 were 
enough to cause a £1.4m drop in 
the interest charge - responsi- 
ble for around half the pre-tax 
profits improvement On bal- 
ance, the non-defence busi- 
nesses were a boon this time 
with the slimmlng-down of the 
surveys division causing a turn- 
round of about £750,000 and the 
aviation support side perform- 
ing welL Those two factors off- 
set a £500.000 downturn in com- 
posites. The overall result was 
encouraging enough to allow 
the shares to climb 30p to 470p; 
assuming £16.5m for the foil 
year that leaves them on a fol- 
ly-diluted prospective p/e of 1L 
In less turbulent times, that 
would look a modest rating. 


Japan Assets Trust 

Japan Assets Trust, invest- 
ment trust, boosted net asset 
value per basic share to 94£p at 
the end of the 12 months to Sep- 
tember 30 compared with 86.9p 
on the same date in 1986. 

The directors proposed an un- 
changed final dividend of 0i.05p. 


Share Stakes 


The following changes in shares 
stakes were reported during the 
past week: 

Trammed Group — Mr GJ. 
Chalk,- a director, sold 100,000 
ordinary and now holds 650,000. 

Stanley Leisure Organisation 
— Mr L. Steinberg, director and 
chairman, bought 100,000 ordi- 
nary. 

Brown * Jachwm - Directors 
CU. Bailey and B-S. Duffy each 
1 232^00 ordinary. Mrs 
3.E. Duffy, wife of B.S.-Dnffy, 
[ 25,000 ordinary. 


Antes ft Hotehesaa - Mr LS. 
Hutcheson exercised Us option 
over 218,750 shares. 

mean Industries - Mr M.W. 
Hlndxparch, chairman and man- 
aging director, purchased 2SJT~ 
ordinary and now' holds 
4^72^42 02.63 per cent). 

City ef Edinburgh Life Assn 
race- Edinburgh Financial 
Trust increased Ha -holding 
from 28 per cent to 41 per cent 
EFT and clients of HIM now 
hold 54 per - cent of the share 
capital .. 


NOTICE OFEARLYREBEMPTIWi 

IRELAND 

. . U.S350, 000,000 

FLOATING RATE NOTES . 

DUE 1990 

Notice is hereby gfven that Wi accordance wfth Clause 5 (B) of 
the Terms and Conditions of the above Notes. The Republic of 
Ireland has elected to redeem all of the outstanding Notes at 
par on the next interest payrnent date 21 st December, 1987, 
when interest on the Notes win cease to accnie.' 

Repayment of principal will be made upon presentation and 
surrender of the Notes with all unmatured Coupons attached, at 
dm offices of any of The Paying Agents mentioned thereon. . 

Accrued interest due on 21st December, 1987 win be paid in the 
normal manner against presentation of Coupon No. 14. 

Hie Sumitomo Bank, limited 

Fbad and Paying Agent 


SOClt Tfi GIiNJiRALE 

FIRST HALF ±987 CONSOUDATED RESULTS 

toconm Tlfo focibase to mainly due to further 
growth of our activity In the Intfolduaf customers market From 
ifljune 1988fo30i«wl9eT. «W£ 

custofnere with the Parent Company hicieaaed by 14 J.%.Avef»ge 

FRF. U, 4M W rtlh. 
1986ffgure. - ; 

Rirt half 1B87 report wM tmosallibto, tqiondort»nd 1 begbi- 
nlngof november. 


WHBtE 

TURFS 


Merrill lynch. Rapemaker Pbce, London. 


• f - n\*- •••• •■ ‘ 

v y-x •'*»*".» ,s - . 
yLi i 


"tjCvt 


THERFS 

BRASS. 


Small wonder a major US bank chose . a 
British Steel-&Hmed building for its new London 
head office. Tbda$ steel looks as good on the 
costing sheet as it does on the designer's 
drawing. 

Steel-framed buildings are also strong and 
faster to erect, and British Steel now holds its 
biggest share in die high-rise market for 
50 years. ^ 

High-rise also describes wbat weVe achieved 
in quality r eliability and customer Service.' 

Thafshowi^rebaddngBritaM 

recovery 

We?re selling British Steel around the world. 
Steel arches for mines... zinc-coated steel 
sheet for cars ... steel for industry for transport, 
for the form, for the home... . 

Easier said than done, when you consider 
that wodd sted supply exceeds worid demand. 
But done, none the less. With a combmation of 
hard work and hard seH 

W^ve moved from deep loss to rising profit. 



Only a few of the world’s steelmakers, have 
achieved this. 

If yon’d like to know more, write for our 
free colour brochure to British 
Steel Information Services, 

-9 Albert Embankment, London 
SE 1 7SN. If s a steeL British Steel 

In shape for things to come. 









Piet cuts loss and is 
‘well placed’ for growth 


Unit rises 
by 25% in 
first half 


BY LUCY KELLAWAY 


Piet Fetroleom, small US oil 
independent controlled by 
Amerada Hess, US oil company, 
cut Its net loss to £102,000 In the 
year to June from £&2m in 1986. 

However the trading position 
worsened slightly with operat- 
ing profit of £267.000, against 
£380,000 last year. The improve- 


ment overall reflected a heavy 
asset write-down in I960, which 
was not repeated last year, and 
a lower exploration charge. 

Turnover was down at 
(£2£3m) and the loss per share 
for this USM-quoted company 
came out at0.79p (37.03p)- ■ 

In a confident statement Ur 
William Grassick, who became 
chairman earlier this year, said 
that following the introduction 
of Amerada Hess as a large mi- 
nority shareholder, Piet was 
well placed to become a strong 
independent oil company. 

In the short term he said that 
the chief aim was to establish a 
positive cash flow and to pursue 


exploration opportunities with 
a risk/reward balance suited to 
Piet's size. Following an asset 
swap with Elf last year, Piet ex- 
panded its onshore interests in 
the UK, and the company said 
that it Intended to broaden its 
onshore acreage international- 
ly- 


Mr Grassick yesterday called 
cm the Government to amend 
the system so that onshore 
exploration costs could be off- 
set against Petroleum Rev enue 
Tax, and to repay Advance PBT, 
which would increase Piet’s 
cash flow by tSBOfiOO. 


•comment 


Hope is not a commodity 
priced highly in such edgy mar- 
kets, and Piet’s share price has 
suffered particularly badly in 
the l utrf fortnight as all the spec- 
ulative talk of new discoveries 


has been knocked out of it What 

is left is a small independent 
with small interests in small 

plays with the comfort of a large 
shareholder no doubt prepared 
to step in should Piet foil on 
hard times again. Even though 

eventually Amerada may do the 
tidy thing and buy the rest of 
Piet, the present position may 
last for some time, as Amerada 
apparently has no appetite for a 
hostile battle, and in' any case If 
it wanted the whole company it 
would have bought it in one go 
last year. While Piet has partici- 
pated in some of better onshore 
UK licences, discoveries have 
been and even if the Gov- 
ernment nhanggg the nnfai|1 on- 
shore tax system the effect on 
Piet would initially be modest 
The North Sea discovery of the 
Waverley field offers more im- 
mediate promise, although it is 
at least partially reflected In 
yesterday’s share price, un- 
changed at 52p. 


Unit Group raised pre-tax 
profits hr 25 per cent from 
SB8MW to amjm on tarn- 
over *p fimn to £8 JJjb 

for the six months to Septem- 
ber 38 1987. 

The WwrriagteB-besed man- 
ufacturer ef timber pallets, 
which joined the Third Marta* 
in Janary, declared its first 
interim dividend af LZSp. The 
directors said yesterday that 
they intend to pay a final divi- 
dend af at least nSpJUter tax 

of £28,tW (£ 11 , 800 ) earnings 
per share came to 8£p QUBp). 

Hr Philip Davies, cnalr- 
maa^afd feat the cempany had 
consolidated its Inffiug posi- 
tion in the UK timber pallet 
production industry with out- 


put reaching record levels. 
The company’s first a nte m sto d 
assembly line was now com- 
plete and operating at levels of 
prodnettoa beyond initial ex- 


A. Cohen lifts 
midway profit 
to £1.32m 


Hawley conversion closed 


Govett Strategic in 
restructuring moves 


Despite some unfavourable cur- 
rency movements and tax 
changes, A. Cohen improved its 
midway profit and said pros- 
pects for the full year remained 
good. 

The interim dividend is lifted . 
to Alp (3.7p) from ear ni ngs up to ! 
36-32p (32.66pX The previous fi - 1 
nal was&4p. | 

Turnover of this non -ferrous 
metal ingot manufacturer rose 
from £2A23m to £25J3m in tlusi 
half year, while the profit 
moved upas per cent tn£L32m 
(£1.24m). Tax cost £843,000 
(£517,000). 


Hawley Group, the international 
services company, has closed its 
offer for early conversion of 
sterling-denominated _ prefer- 
ence shares after receiving ac- 
ceptances from holders of about 
47 per cent of the issue. 

The offer was launched be- 
fore the stock market crash, 
which removed much of the at- 
traction of the better conver- 
sion terms which Hawley was 
offering. As a result of the de- 
cline in Hawley's ordinary 
shares, the terms gave holders 
no capital uplift by the dose of 
the offer compared with 114 
per cent - intended to offset the 
33 per cent fall in income - 
when it was announced. 

Hawley nevertheless suc- 
ceeded in reducing the size of 
the only remaining sterling-de- 


nominated primary obligation 
in its balance sheet Registered 
in Bermuda, Hawley reports in 
US dollars, the currency in 
which 75 per cent of its reve- 
nues are based following the ac- 
quisition of APT, 


Gevett Strategic Investment 
Trust, part of the John Gevett 
stable, Sm sold its entire hold- 
ing In DKG, the paper and 


packaging group, together 
with interests in Crescent Ja- 


Burtonwood 


with inte re st s in descent Ja- 
pan and New Tokyo Invest- 
ment Trust, two ftr Eastern- 
based fend. 





■uTlvlj 




1 



In last Friday's FT, itwasincor- 
rectly stated that ®®rtwwasd 
Brewery was recently the sub- 
ject of an abortive bid approach 
from Midsummer Leisure, in 
feet Midsummer made the ap- 
proach to Boddlngton Group. 

QUARTO GROUP : Accep- 
tances were received for a total 
of 180A303 new sharet 
cent) in respect of the 
sue. 





Suitably Retiring. 


^Foreign & Colonial have been quietly managing people’s 

money since 1868. , . , , , 

And managing very nicely too if total funds ot around 

£2000 million are anything to go by. 

But have we been a little too discreet about our discre- 
tionary pension fund management? 

dT Six years ago we entered the market 

»» ^And, as the graph shows, we?ve been 

a M in the top 25% of funds in performance 
fB “i* terms ever since. 

Pg Not, of course, that these figures 
2 ,.,*“*; & came from our lips. They’re all from 

f|; I ^ The WM Company. 

Overlyr. 0ver3yis. 0var5yrs. I tfTWe’d put our success down to long 
flafiglOTSto 31 ^ ^ experience in asset allocation, excellent 

□ Pension fund upper quartfle * - i i ■ -i. 

□ fe reign &cok>niai average pension futri g^ock selection, and an extremely Align 
degree of service. Allof which we’ll happily discuss with you. 
^JOur figures still speak for themselves: But perhaps it? s time 
we had a word too? 




Pensions 



1 1 Pounmey Hill, London EC4R OBA. Telephone Heather Roberts on 01-623 4680. 









jrrff 




Aii, 



i*)«* 


rraa 














wKzrrnn *■ 

8»H 



investment banks, and certainly 


Associated 

British Foods 


Half Year Progress Report 


Six Months to Six months 10 
^September 27 September 

. . ^TW87- 1986" 


Year to 
28 March 
J9K7 


£ nation 


£nuIlion 


£ Bullion 


Turnover 0 

- excluding ABF Investments Group 


Trading surplus 
Interest payable 


1,068.0 

53.4 


1,006.0 

45.8 

3.7 


2,202.0 

120.1 

8.0 


Group profit 

_ finding ABF Investments Group 


Investment income • 

Profits of ABF Investments Group 


Profit on ordinary activities before tax 

United Kingdom tax 
Overseas tax 

Profit on ordinary activities after tax 
Minority interests 
Profit on ordinary activities 
attributable to the company 
Extraordinary items 


50.8 

42.1 

112.1 

31.9 

22.2 

70.5 


7.9 

7.9 

82.7 

72.2 

190.5 

19.7 

162 

41.5 

10.6 

9.6 

22.6 

52.4 

46.4 

126.4 

1.6 

1.0 

22 

SOX 

45.4 

124 2 

1.7 

2.2 

327.2 

52.5 

47.6 

451.4 


Ordinary dividends 
1st Interim 
2nd Interim 

Earnings per share before extraordinary items 

*Holfytarfiff 0 Si u naudited. 


lL4p 


30.3p 


Note: Our interest in ABF Investments, which included Fine Fare, was sold last year on 27 
June 1986 The results of ABF Investments for the three months have been excluded from the 
turnover and group profit for last year in order to facilitate comparisons with the continuing acti- 
vities of the group. 


. Mr. GARRY WESTON, reports: 


Profits before tax for the period increased by £ 10.5 million or 15 per cent to £82.7 million. After 
providing for taxation and minority interests the profit attributable to the company for the half year is 
£50 S mufion. an increase of 12 per cent 

Worldwide sales of the continuing activities of the group following the sale of ABF Investments 
in June 1986 increased by £62 million or 6 per cent On sales of £1,068 million a trading surplus of 
£53.4 million was achieved, representing an increase of 17 per cent when compared with a similar 

investment income at £31.9 mfilion shows an increase of £9.7 million when compared 
with the first half of last year, the result is nevertheless below budget our funds under management not 
having achieved the expected rate of return anticipated during the period. A similar fall in investment 
income was reported for the same period last year. This was followed by a recovery in the gilt market 
which substantially improved the rate of return for the year. 

The group’s investment income was further reduced by the use of a substantial part of these 
funds to purchase a 23.7 per cent stake in S- & W. Berisford PLC. Subsequently an offer was made on 
15 October 1987 topurcoasefor cash the remainder of the share capital of Berisford. 

' The combined sales of the continuing activities in the United Kingdom increased by 5 percent to 
£696 million and trading profits by 13 per cent to £34.1 million. Our major manufacturing divisions 
have made a satisfactory start to the year, whilst good progress has continued to be reported from some 
of our smaller companies operating in more recently developed areas of manufacturing activity. 

Ovezseas sales at £372 million and trading profits of £ 19.3 million increased by 8 per cent and 


2 a per cent respectively. The effect of currency realignment on these results has been minimal this 
year. George Weston Fbods in Australia have further consolidated the improved trend in results over 
the past two years and in terms of local currency the profits for the half year increased by 31 percent, 
with all the major divirions performing strongly. Australian results have been converted at 2.30 dollars 
to £1. 

We have continued our normal high hrvd of expenditure on plant and equipment to ensure that 
an our factories throughout the world have die most up-to-date technology available. 

While we are confident that increased profits wifi be achieved by our trading divisions in the 
United Kingdom and overseas, until we know the final outcome of our offer for S. & W. Berisford PLC, 
it is difficult to make any forecast of the final results of the group for the yean. 

At a Board Meeting today the directors declared a first interim dividend of 2-5p per share (1986 
- Z2p) which, together with the associated tax credit, is equivalent to 529p per share (1986 - 3ip> 
This interim dividend will be paid on 29 February 1988 to shareholders on the register at the dose of 
business on 29 January 1988. 


Associated British Foods pic 
Weston Centre, 68 Knightsbridge, London SW1X 7LR 






















3<S 


financial limes iuesua> Mo^enioer o iydi 


COMMODITIES AND AGRICULTURE 


Gulf states seek higher 
Opec production ceiling 


BY RICHARD JOHNS 

FOUR ARAB producing states of 
the Gulf are proposing that the 
Organisation of Petroleum Ex- 
porting Countries should raise its 
collective ceiling on output from 
the present rate of 16.6m barrels 
a day to 17.5m b/d from the 
beginning of next year- 
Saudi Arabia, Kuwait, the 
United Arab Emirates and Qatar 
apparently want to set a level 
chat would make It passible to 

E parity between Iran and 
under Opec's present pro- 
on sharing agreement. 

Th^r also want to keep official 
selling rates centred around a 
reference of $18 per barrel, ac- 
cording to a report published 
yesterday by Kuna, the offical 
Kuwait news agency. 

Under the pact reached in July 
Iran accepted an entitlement of 
2.369m b/d. Iraq was allocated 
one of 1.54m b/d but opted out 
of the accord and has in practice 
been pumping at a rate of 2 2m- 
2.3m D/d recently. 

The higher ceiling would allow 
scope for giving an equal share 
to Iraq and Iran while also giv- 
ing an extra margin to satisfy, 
demands of other producers like 
the United Arab Emirates, the 
most outrageous quota violator 
among the member states which. 


have signed the pack 

The position taken by the four 
states - attributed to ‘high level 
oil sources* - is almost certainly 
the one which they will adopt at 
the next Opec conference, sched- 
uled to start in Vienna on De- 
cember 9. 

Other members of Opec are 
likely to regard a raising of the 
limit on collective output as to- 
tally unrealistic in view of the 
excess production since August 
Most market analysts believe 
that a reduction in the ceiling 
will be required if the $18 price 
is to be maintained during the 
first quarter of 1988. 

Even if UN diplomatic efforts 
achieved a cease-fire in the Gulf 
conflict meanwhile, it is doubful* 
whether Iran would, be prepared 
to contemplate conceding parity 
with Iraq having consistently de- 
manded a share twice as great. 

Iran is also insistent that Opec 
prices should be raised to 520 
per barrel At the next confer- 
ence it wKL be supported in its 
demand by other members, in 
particular Algeria and Libya. 

Finn Bane reports tram Ri- 
yadh: Mr Hisham Nazer.the Sau- 
di Arabian Minister of 03, has 
given the first public acknowl- 


edgement that the Kingdom is 
planning to restructure its oil in-: 

dustry. 

He gave no details but stressed 
at a symposium held in Jubail 
the need to make the refining- 
sector more profitable. 

Reorganisation of the sector. 
has been the subject of much 
Industry speculation and a move. 
to greater co-ordination is expec- 
tedT Currently, it is run by two 
different entities. 

The Arabian American Oil' 
Company - dating back to the 
beginning of the old concession 
obtained by US companies and 
still registered in Delaware, 
though wholly state-owned - is 
responsible for all ofl and gas 
output in the Kingdom proper.’ 
the refinery at Ras Tanura ana 
operation of the trans-peninsula; 
oil pipeline. Effectively, it b run. 
by a service company owned by 
the old concessionary companies! 
- Exxon, Chevron, Texaco ana 
Mobil 

The state-owned ofl corpora- 
tion, Petromin, only handles gov- 
emment-to-govemment crude 
«yi*g and the domestic market 
for products. It owns but does 
not operate the east-west pipe- 
line. 


Commodities 
tables 
revised 

THE COMMODITIES tables have 
been redesigned with the aim of 
achieving a clearer and more 
consistent presentation. 

The changes include the addi- 
tion to the LME figures of open 
interest - the number of on- 
matched contracts outstanding 
at the end of the previous trad- 
ing day. The Main Price Changes 
table has been replaced by ai 
Spot Markets table showing 
physical, as against futures} 
prices. Much of the statistical in- 
formation which has previously 
appeared in market commen- 
taries beneath tables Is now in- 
tabular form. Where appropriate 
comments on individual markets 
win appear in the London Mar- 
kets or in reports in the editorial 
section of the page, which has 
been enlarged as a result of the; 
changes. 

The changes have best madti 
to coincide with the introduction 
of computerised typesetting to 
the rage - the last in the Finan- 
cial Times to be switched on to 
the new system, I 


Brazilian producers lift 
sisal export prices 


BY RK TURNER IN S40 PAULO 

BRAZIL, THE world's leading 
producer of sisal, is raising in 
prices for both sisal fibre and 
bale-twine. 

For years Brazilian manufac- 
turers have competed among 
themselves for prominence in 
the world market, and prices 
have fallen. But the manufactur- 
ers have now acted together, 
andnegotiated an increase in ex- 
port prices with Cacet, the Ban- 
co do Brasil's foreign trade de- 
partment The sisal fibre price 
will go up by 14 per cent to 
US$400 per tonne, while bale- 
I twine, a semi-finished product, is 
to rise 25 per cent to S13J50 per 
bundle of 18 kgs. 

Brazil w31 produce 185,000m 
tonnes of sisal this year, of 
which 85,000m tonnes will be ex- 
ported jnainly to the US and 
Canada, in the form of bale- 
twine, with another 75,000m 
tonnes of fibre also being sold 
abroad, according to Mr Joao 
Lopes Araiuo, superintendent of 
Sisalane sa lndustria e Comerdo, 
a manufacturer based in Salva- 


dor, capital of the state of Bahia, 
the main producing area. 

Sisal’s primary use is in rape 
for tying bundles of agricultural 
produce. Its main competitor is 
polypropylene, the synthetic fi- 
bre, which is at the moment 
highly priced on the internation- 
al market. 

The natural product is once 
again a good option, said Mir Ar- 
aujo, particularly for bundling 
hay to feed cattle, who can eat 
the fibre. Bundles tied with poly- 
propylene must first be untied 
before feeding the animals. 

Kenya, Brazil's main rival In 
the sisal market, is limited to 
exporting fibre because it lads a- 
processing industry. Tanzania, 1 
which once produced as much as 
220,000m tonnes a year, is now 
down to 30,000m tonnes a year. 

•Jute producing and importing 
nations opened tan» in Indone- 
sia yesterday to h/mmer oat a 
new agreement far the llbn-a- 
year world jute trade. Renter re- 
ports. 


Danish farmers reduce pig herds 


BY MLARV BARNES N COPENHAGEN 


THE DANISH pig herd is declin- 
ing in spite of satisfactory profits 
currently from pig production, 
according to the pig census sur- 
vey by the nffirani Bureau of Sta- 
tistics. 

The number of sows to pig far 
the first time on October 2 was 


down to 6C8.000 from 530,000 inj 
July and 528,000 a year eariiar. 
The total number of sows in pig 
fell to 635.000 from 669,000 in 
July and 650,000 to October last 
year. 

Lack of cofidence among farm- 
ers was blamed for the situation 
by Mr Erik Skovgaant Kristen- 


sen, deputy chairman at the 
slaughterhouse association. He 
said tougher antipullutkm regu- 
lations, calling for heavy invest-, 
merits in storage facilities for mg. 
slurry, together with fears that 
new animal welfare rules win re-, 
duce farming efficiency, were 
behind the breeders’ pessimism. 


Law Lords 
study ITC 
documents 
appeal 

By Raymond HutfiM, Law 
Courts Correspondent 

. FIVE LAW Lords were yes- 
terday asked to decide 
whether copies of docu- 
ments of the International 
Tin Council en be need as 
evidence In l itiga tion aris- 
ing out of the ITC*a collapse 
into Insolvency in October,, 
1985. 

At Issue is the extent of| 
the inviolability granted to' 
' the FTC’s official archives 
by the 1978 International' 
Tin Council (Privilege* and 
I mmuni ties) O rin. 

Under challenge is a rul- 
ing of the Court of Appeal 
in Jn ly that, if an axchive 

documen t wa s copied with- 

out the FTC’s consent, ad-, 
thar the copy, nor s e cond- 

ary evidence of the 
document's cont e n ts or in- 1 

formation de ri ve d tom it, 

coaid be used in evidence. 

However, the app«ml court 
MS, documents lost their' 
inviolability when distrib- 
uted by the ITC to Its nan> 
ben - the UK and 22 other 
states and the European 
Community. 

The ruling was made after 
the ITC intervened in a case 
in which two Shearaon Leh- 
man companies axe claiming, 
more than Min from Ma- 
claine Watson and and an- 
other tin trader, JJBLRayner 
(Mincing Lane), under tin 
sale contracts, challeng- 
ing the validity of the Lon- 
don Metal Exchange's Rule 
M, which imposed a fixed 
settlement price on out- 
standing tin contracts fol- 
lowing the FTC’s collapae. 

Various parries In the ac- 
tion have obtained copies of 
ITC documents which they 
want to use as evidence. 
The ITC argued that all the 
relevant material was pert 
of its archives and twnrnan 

Mr Sydney Kentrldge,QC, 
for Maclaine Watson, said 
yesterday that the FTC had 
no remedy hosed on the in- 
violability of its archives 
once e d — — I bad mom 
into the of i third 

party, provided It had mot 
been obtained illicitly, as, 
tor example, by theft or 
bribery. 

The appeal court’s deci- 
sion is also bring chal- 
lenged by the ITC, which 
contends that all its docu- 
ments are inviolable, even 
when distributed to mrm 
bers, unless It waives the 
inviolability. 

The hearing foatiunss t» 
day- 


(Change during vakaririM Ms) 


Atuminfean standard -825 to 5*725 

AJumWun high grade +2525 *> 45,100 

Copper -12£50to “W- 

' *3 SSO ID 17,250 

M -534 to 2J60 

Zinc -50 id 94,725 . 


Crash dents aluminium’s upsurge 


BY DAYS) BLACKWELL 

STRONG FUNDAMENTAL fac- 
tors in the base metals markets 
have been totally overshadowed 
fay the plunging equity markets - 
and aluminium has emerged as 
the principal casualty. 

In the srace of a couple of 
days after Blade Monday, when 
the equity markets fell off a cliff, 
the bull market was stopped to 
its tracks. The sustained bull 
trend had taken the LME cadi 
price from about £780 a tonne 
for standard grade, or 99.5 per 
cent purity, metal in January to 
SI, 252 a tonne on Monday, Octo- 
ber 1ft The next day ft phrnged 
by S107 a tonne and by tost 
Thursday's close it was below 
£1,000 a tonne. In the last two 
trading dim the price has recov- 
ered by 567 a tonne, but it would 
be a brave man who said that 
confidence had returned to the 
market. 

Copper prices wait into free 
fall with aluminium, bat have 
staged a better recovery over the 
past couple of weeks as stocks 
are to extremely short simply. 
Copper stocks are at 13-year tows 
- they fell at the LME ware- 


houses far the sixth successive 
week last week. They an also 
tight on New York s Gomez, 
which has a very actively traded 
copper contract 

However, the Come* alumini- 
um contract pales into insignifi- 
cance besides the LME’s two con- 
tracts, which handle most of the 
futures trading to the metal. The 
volatile bull market this year has 
attracted a lot of speculative 
money, and heavy trading in 
tians in the face of tight 
has added impetus. 

In the words of one trader - 
“aluminium had gone up that 
much further, 50 it had that 
much further to fall" Analysts 
agree that the aluminium market 
has lost all sense of direction, 
with the backwardation (or pre- 
mium for cash metal over the 
forward contracts) varying wild- 
ly. The change of sentiment has 
led traders to liquidate long posi- 
tions. They are not Mkriv to re- 
turn to the market while it re- 
mains so volatile, especially 
while they fear further falls in 


.while the predotn metals 


sector has not behaved as many 
thought it would in thewake to 
the equity crash. Immediately af- 
ter the initial impact gold pncea 
leapt to a fcmr-and-a-half year 
hfehof S48L50 a troy ounce. An- 
alysts predicted a terakthrough 
to $500 an ounce if the equity 
plunge continued against a back- 
ground to a declining dollar awl 
the growing tension to the Mid- 
dle 

However, the following day it 
ten right back to $466 an ounce, 
pnri has remained at dose to that 
level since. This is partly due to 
the fact that holders of gold were 
forced- to sell the metal to cover 
margin l * a ^ l! on futures and 
losses to the equity market It 
has also been suggested that the 
possibility of a stock market 
crash might have already been 
taken into account by toe gold 
market 

Both silver and platinum have 
suffered because of gold's failure 
to taiira off, reinforcing the view 
of some analysts that these 
«><nniiH now be regarded as indus- 
trial metals. Silver stood at 
49&5p a troy ounce on October 


19, but was' fixed yesterday at 
404.5ft. . . .. . . 

Platinum, which had been at 
about $570 an ounce for moat of 
the summer, dipped to $515.75 
on Friday before recovering to 
$528 an ounce yesterday. Ms 
Rhona O’Connell of Sheamtt, 
Lehman believes platinum to be 
particularly susceptible to any 
hint of a recession now that al- 
most 60 per cent of it is used for 
industrial purposes, such as cata- 
lytic converters for car exhausts. 

In addition, a spate of new 
mine announcements recently 
means that up to an additional 
38 tonnes a year of the metal 
could be in production by 199,1, 
compared with a current world 
consumption of 83. 6 tonnes. 
However, EC exhaust emissions 
legislation could mean another 
25 tonnes a year being used in 
the production of catalytic con- 
verters within the next six years. 

Soft commodities have re- 
mained comparatively stable - 
but that is mainly a reflection on 
the depth of the depression 
which had already settled over 
these markets. 


Muddling through on marketing 


S8vor {az}. -KMjOOO to 1958*500 


FOR AS long as I can remember 
British farmers have been criti- 
cised for poor marketing. We do 
not co-operate very well; we do 
not present our produce attrac- 
tively; nor, we are told do we 
produce what the customer real- 
ly wants. All to all, the critics 
say, we do not bear comparison 
with the efficiency of the Dutch, 
the French and the Danes, or 
any of our o ve rseas competitors 
in wooing the housewife - either 
at home or in export marim* 

There is a certain amount of 
troth to this but there are some 
very extenuating circumstances. 
Until fairl y recen tly Britain was 
a terminal market for farm pro- 
duce from all over the world. 
The products our competitors 
sent Si had been through export 
bottlenecks which saw to it that 
only the highest quality got here. 
The balance was taken off the 
market in the country of origin 
and either destroyed or pro- 
cessed. The funds fra- tills opera- 
tion came either from a levy on 
formers or, in many cases, from 
taxpayers. The inequality of 
funding was highlighted by Mr 
Walter Goldsmith, the chairman 
of Food From Britain, the other 
day w hen he pointed out that 
while FFB had to manage on 
$i2m France and Germany sup- 
ported ftrir formers* 
efforts by about 10 times that 
figure. 

The nearest British forming 
came to a sensible marketing 
policy was with the formation of 
the Milk Marketing Board in 
1933. This statutory body was 
e mp owered to buy all wrifir pro- 
duced to its area, England and 
Wales, market it to the best ad- 
vantage, and then to pool the 
earnings for the benefit of all 
producers. 

Prior to the Board’s inception 
jrulk selling for the formers was 
-a shambles. The big dairy com- 
panies were able to dominate the 
.market and any attempt by pro- 
ducers to combine to withhold 


FARMER'S 
VIEWPOI 


By John Cherringten s 



supplies from was d efeated 
by the time-honoured technique 
of divide and rule - ywM> produc- 
ers would be offered attractive 
contracts and the remainder 
would be threatened with being 

irpnhl<» to aril thrif miTlr gt *H- 

The Board was set up under 
the Agricultural Marketing Acte. 
Boards covering several other 
form products were set up but 
they never received the support 
either of farmers or of subse- 

S t governments, and they 
out. The reason for tins 
was firstly that they could not, 
like the MMB, have monopoly 
control of the market. Then once 
the post war Agricultural Acts 
with their guaranteed prices 
came into force the need for 
them was not so obvious. 

Farmers are often blamed for 
not producing the quality the 
public really wants. This is un- 
fair. All the time I have been 
farming 1 have tried to produce 
the animals *nd the grain I am 
told is needed - so have most 
other formers. But these efforts 
have been veay ill rewarded. The 
people .we sell to to many cases 
are the middlemerL the wholesal- 
ers. They will seldom make a 
contract which will guarantee a 

£ rice some wav ahead. They 
ave justification tar this. 
Farm output is not always pre- 
dictable. The weather can ruin 
much of a harvest, while the 
feed from a poor harvest can se- 
riously affect the performance of 
pigs and poultry. A drought or 
excessive rain can delay or has- 
ten the marketing of grazing ani- 
mals, making nonsense of the 


predicted quality sta nd a r ds. 

Farmers have observed, more- 
over, that buyers' ideas .of quali- 
ty are very subjective. If there 
are many first class lambs on the 
market the premiums paid are 
derisory, but if there is a short- 
age second class stock makes 
very little less than the best 

Inis year it has been the same 
with malting barley. Early to the 
harvest some of my barley was 

for too high in nitrogen. When 
the real disaster of this harvest 
was realised I was able to sell 
this at a good premium and if I 
had not been so short of cash 
and had waited a fait longer I 
would have got more. 

We might, as farmers, be more 
aware rathe real position if we 
had contacts with the ultimate 
buyers - the maltsters the millers 
and the supermarkets, or even 
the exporters. But this is where 
the middlemen come in. The last 
thing they want is tor formers 
and processors to get together. 1 
am not suggesting these middle- 
men are getting their heads to- 
gether to wfhor formers 

or their customers. In fact it is a 
highly completive sector, par- 
ticularly for meat wholesalers 
where there have been some 
spectacular collapses of late 
years. 

Most buyers of finished cattle 

prices in^feadweight^tenns. ? 
have always sold my sheep and 
pigs that way as I think it is 
better fra the animals and I do 
get a bonus for quality. Nine out 
-of ten are sold that way, but 


only about 30 per cent of sheep 
and 50 per cent of cattle. The 
remainder go to livestock auc- 
tions where they are graded 
alive and then sold to the high- 
est bidder. Farmers like the live 
auctions because they say that if 
the grading does not suit them or 
juices are bad they can with- 
-draw the animals and offer them 
at a later date. They also like the 
competition of the auction ring 
it must be said here that in our 

E resent marketing system the 
ve auctions are essential as 
they determine the level of the 
'trade and provide the esential 
competition which the wholesal- 
ers do need, it Is essential to 
realise that the level of the mar- 
ket price is very largely deter- 
mined by the supply on the day. 
If you are already committed to 
.a fixed price sale you cannot 
take advantage of fluctuations as 
they occur. 

As to quality there is no doubt 
that supplies are much more in 
Itoe with what the market, main- 
ly the supermarkets, says it 
wants. Fanners have made great 
strides to breeding leaner ani- 
mals for instance, out I am not 
sure that either formers or their 
ultimate customers ore very well 
served by those who process 
their output. 

I often hear complaints about 
quality, of meat and bacon in 
particular, but it is not fair sim- 
ply to blame we formers. Meat 
needs just as much care to condi- 
tioning once slaughtered as it 
does to produce the animal but 
It is possible that such care can- 
not be taken when it is handled 
in such enormous quanties as it 
is by the major multiples. 

There is-one further point that 
has always puzzled me. Every 
week literally thousands or Brit- 
ish cull sows are exported to oar 
EC partners for processing into 
pate and other delicatessen prod- 
ucts which are sold back to 
Britain. Surely that value could 
be added at home. 


INDICES 


FRBOHT FUTURES E/lndex potat 


181931*100) 


Odd (teie owes) 


Oct 30 Oct 29 month ago year ago 


18455 19395 16405 


1504* 


DOW JONES [Bok Septentoer 18 1931 ■ 100) 


Spot 128.09 
Future 127.75 


12553 

120.70 


12654 

13057 


11750 

12159 


LONDON MARKETS 

COPPER PRICES were boosted 
yesterday morning on the London 
Metal Exchange as speculators 
covered against short positions aid 
a further sharp fan in LME 
warehouse stocks last week 
encouraged some fresh buying. 
Dealers said the stocks fan 
reflected a "broad front* of 
consumer demand from the US, the 
Far East and Europe, with Mgh 
premiums being paid for good 
quafity material. The past three 
weeks had seen a total 1aH In LME 
stacks of more than 30,000 tonnes, 
they noted. The premium for cash 
over forward metal widened early In 
the day in response to investor 
'borrowing* (buying cash and 
selling forward). Gains were 
trimmed back somewhat in the 
afternoon as starting strengthened 
further against the dollar, but the 
firmne ss of die New York market 
underpinned the London trade. 
Aluminium prices also moved 
higher, again on fresh buying and 
short-covering. But the advance 
was pared beck in the afternoon. 
News that Alcan had locked out 
unionised workers at midnight on 
Saturday at its Shawlnlgan, 

Quebec, sm elter had only a limned 
effect on market sentiment, dealers 
said. 



S price 

£ equivalent 

does 

$470 

£27014 

Opening 

$470 

£27014 

Morrtngte 

$48935 

£271338 

Afternoon flx 

$46930 

£271.272 

Day's high 

$470)4-471 

— 

Day s low 

$489-46914 

— 

Wear (foe ounce) 


UK pence 

US cteeqter 

spot 

40*30 

70030 

3 months 

41*35 

71336 

6 monthe 

42430 

727*0 

12 months 

44036 

756.15 


Citato el (per barrel FOB Decanted +cr- 


17.10-1750 -008 
1850-1859*035 
W.T-L (1 pmedt) 1950-1955 -033 


QoU*l 


S price 


EtquMM 


US Eagle 
MapMeaf 
Krugarand 

1/ZKnjfl 
1/4 Krug 

fSoAngel 

New Sow. 
OMSow. 
Britannia 
Noble Plat 


$484-488 

$499-472 

$243-252 

$120-128 

$479-484 

$47-82 

Slimi-Ill Vi 

$ 110-112 

$484-489 


£279(4-282*1 

E279K-282K 

£270%-372fc 

£13914-145 

£99-73% 

£27514-278* 

£27-30 

£83%-64» 

£83*-84* 

£27914-282* 

£30214-304 


LONDON Menu XXCfUNM TRAMP OPTIONS 


Akantahan (99544) 


Strike price Surra 


Jan Mar Jan tier 


1725 

1750 


1800 


96 19% 81 60 

87 12 94 67 


68 4 122 109 


i (NME praapt deanery par tonne OF 
December) +or- 

Prmrturo Gancfina 184-187 -1 

Gee OR 157-188 

Heavy Fuel OI 9507 -1 

Naptha 100-182 -1 

P W W a u tn Agee anew 

OOrer ■» or- 

Go« (per troy az) $470 +256 

Sever (per troy az) 40450p * 3-10 

■FM!nuni(partroya4 <629 5 0 +1255 

Patodfeim (per troy <g) $11755 -050 

AJumtahsnArM market) $1946 *45 

Copper (US Producer) 88JOO0 

Load (US Producer) 42c -1 

Nickel (free market) 270c -7 

Tin (European free market) £4040 - 5 

Tin (Kuala Luapir raarireq 17.1Qr -015 

Tin (Net* York) 3225c -1 

Zinc (Ero-Prad. Price) $820 

ZUC (IIS Prime Weatem) 43376c 

CatSe (live wmighQt 9752 4-254 

Sheep (dead woighOf 19153 -<-1050 

PjqanvevreiohOf 7553 +054 

London da8y sugar (raw) $18950 +150 

London duty sugar (wfcto) SISSOGbc -f 250 

Tata and Lyle export price £21550 

Barter (Engfehieed) 210650 -050 

Mafas(USNo.3yaSaw) £13350 4-050 

Wheat (US Dark Northern* £91.75 -025 



Ctoee 

Previous 

HWUw 

Jan 

12303 

12403 

12403 

Apr 

12553 

129*3 

12803 12563 

Jty 

11343 

11463 

11403 113*3 

BF1 

11723 

11713 


Tumowr 72 (157) 

GRAMS E/torme 

Wheat 

Ctoee 

ftmrious 

rwira* 

Nw 

109*5 

10830 

109*5 109.10 

Jen 

11225 

11170 

11226 11130 

Mar 

11426 

11376 

11425 11335 

May 

11670 

11620 

118.70 11636 

Jly 

118.10 

118*5 

119.10 11855 

Sep 

10230 

10130 

10230 10130 

Noe 

10330 

10330 

10330 10330 

Bariev 

Ctoee 

Pretoen 

Mgh/Law 

Now 

10S3S 

10635 

10535 10830 


10726 

10830 

10730 10730 

Mar 

10920 

10636 

10930 10930 

May 

11130 

11035 

1113011076 

Sep 

9830 

9930 

19830 19830 

Now 

10075 

10076 

10075 10075 


POTATOES Sficnna 


Rubber (Jen)f 


61-7Sp • 075 

8L75p -075 

95550 -075 


Copper (Grade A) 


Strike price $ torra 


Jan Mer Jan War 


1900 

i960 

2000 


123 131 78 143 
99 111 102 172 
77 93 130 202 


Capper (Grades) 


Strta price Storm 


Jan Mar Jan Mar 


1100 

1125 

1150 


61 V4 30 30 37 

48)5 SOn 47» Sri* 
37% 131* 91 68)* 


Coconut ofl (Phfcpines# $470 
Pekn qyMataw&W $345 -5 

Copra (PMppkwJS $320 

Soyabeans (US) $1375 -295 

Cotton -A" index 7356c +150 

Woottopa (84a Super) S16p 

£ a tonne unleee cO rarw rie e rated, p-penoe/ka. 
o-centeflbs. r-ringk/ka. eOct/Nov. w-fiev. 
*-No»/De*i.y«Ooa ifriran/Feb. t Meet CammMkn 


Ctoee 

Prevtoos 

Hgh/Low 

AM Official 

Kerb does Open Interest 

Ahantoksn, 987% porky ($ per tonne) 



FSng turnover 0 tonnes 

Cask 1836-45 

3 monels 1735*5 

T 80020 
1890-700 

1725/1705 

164060 

1740-60 

unquateo 

2*89 

AtoinMute393% ptaky (£ per tonne) 



Rkifl turnover 2i^/5 tonnes. 

Casfi 1082-7 

3 months BB5-8 

104860 

978-7 

1087 

1008/964 

1086-7 

1006-1 

984-6 

62540 

Copper, Oracle A (E par tome) 



Ring turnover 6422S tomae 

Cash 1194-6 

3 months 1113-4 

11756 

1098-90 

1200/1198 

1118/1107 

1200-3 

11153 

1114-6 

122774 

Copper, teanoard (E per mine) 



Mng kenomr 150 tomes 

Cash 115060 

3 months 11006 

1115-26 

107360 

1160 

1157-60 

11056 

33 

Sfhwr (US centt/Bw ounce) 



Rtag henowr 2 tonnee 

Cash 093-700 

3 month* 712-4 


712 

696701 

713-5 

712-6 

559 

Lead (£ par toms) 




Rtag turnover 11*00 torma 

Cash 343-5 

3 months 336-7 

3386 

332-3 

3425 

337/330 

34535 

3385-7 

330-1 - 

11281 

NJdtelfE per tonne) 




Rtag turnover 898 tomes 

Cash 334060 

3 month* 331530 

3350-60 

33336 

3375 

3345/3335 

3375-80 

3340-50 

3310-30 

3442 

Zkieff per tonne) 




Rtag Iwnover A075 terra* 


•wage fatetock. * change torn a wreak ago. 
♦ London phytocal market § OF RottanJam 


There were 26A81 packages on 
offer in this week’s sale fnduc&ng 
2^00 packages in the offshore 
section, reports the Tea Brokers's 
Association. 

QuotetionstGuaBty 175p a kg 
(175pfcmecflum 102p a kg 
(lOOptiow median 84p a kg (S6p). 
COFFEE £Aonna 


Turnover 91 (93) lots oM 00 tonnes. 
SUGAR (S per ®nr»r 



Ctoee 

Previous 

H0h/Lo* 

Nov 

12*9 

1242 

1249 1230 

Jan 

1% 

1279 

1287 1267 

Mar 

1315 

1309 

1315 1296 

May 

1342 

1335 

1340 1320 

fy 

1380 

1365 

1358 13*3 

Sap 

1370 

1380 

1363 1966 

Nw 

1400 

1410 

1363 1383 


Turnover Wheal 202 (Z7S9 . Barter 85 (7$) . 
lots of 100 ( 



Ctose 

Previous 

Wgh/tirw 


88.10 

850 

3620 86.00 

Feb 

101.30 

100.0 


Mar 

90l50 

91j0 


Apr 

149.70 

1475 

1508014550 

May 

1634)0 

1606 

1635016320 

Nov 

7520 

750 


Turnover 1007 (771) tote of 100 torma. 

aOYABEAN MEAL Qkm 


CtoM 

Previous 

W^VLovr 

Dae 

131-00 

13250 

13120 13050 

Fab 

13250 

13450 

13250 13200 

Apr 

13250 

13350 


Jin 

12420 

12550 

12450 12400 

Aug 

12350 

12350 


Oct 

12350 

12500 


Dec 

12650 

12800 



Raw 

Ctoee 

Pisvteue 

Hgh/Low 

Dec 

16350 

16420 


Mar 

16900 

17020 

1710016850 

May 

17020 

171*0 

1720017000 . 

Aug 

17200 

17220 

17300 17150 

Oct 

17300 

17400 

1745017250 

Dae 

17850 

17040 


Mar 

18250 

18200 

18250 16250 

WWto 

Ctoee 

Previous 

M0I/LOW 

Dec 

19450 

194.70 

19500 19400 

Mar 

20020 

20100 

20120 20000 

Mqr 

Aug 

204*0 

20600 

20400 20401) 

20600 

20850 

20600 20750 

Oct 

20650 

20950 

20950 20650 

Dec 

21000 

21150 

21000 21000 

Mar 

21800 

21700 



US MARKETS 

The precious metals came under 
pressure from trade, local and 
commission house s eN ng faiowtafl 
earter atom of mBd strength, 
reports Drexei Burnham Lambert 
Shortco min g towards the doae 
pared to a e oe. Copper railed 
sharply on trade and focal buying 
'which touched off comml aat on 
house buy-etope. Crude ofl and the 
energy futures a* came under- 
pressure front trade eeBna which 
touched off sen-stops as the 
markets penetrated support levels. 
Cotton raBed strongly on trade and 
oommtsston house buying, but 
gains were pared by profit-taking 
and local fang-fouldatfon. Coffee 
raised on commi s sion house buying 
against the weaker doflar. Cocoa 
raBed o n trad e buying, but ran into 

lugar raBed on oom mi eteqnhouea 
buying before the trade emerged as 
selers at the highs, forcing locals 
to liquidate tongs. The meats were 
al sharply tower across the board 
refteoing weaker cash prices and 

responding to renewed BqukiatJon. 
In the grates, wheat fen following 
Friday s report that the l)S 
Gov e rnme n t would eeB 10m 
bushels from Inventory on a 
weekly basis against poseWe 
proya mm e sales to Eastern bloc 
countries. Maize Mao M under the 
influence of the movement of 
stored mates as < rasuft of the 
unseasonably warm and damp 
weather. Soyameal tod under the 
weightoflong-iquktetton, which 
also weakened soyabeans. 
Soyabeans were weak. 

New York 

BOLD 1P0 trayaz^VtrayqE. 

CSow Previous WgiVLowr 


10 


Tumowr Raw 3689 (1468) 
WWW 1480(831). 

Psris- (FFr per 
May 1908. Aug 1235. Oct 


Us of 50 tomes, 
lias, Iter 1176, 


Turnover 4830 (7290) iota of 16 tomes 
ICO Motor prices (US cents per pound) lor 
October 30 :Comp. dsty 11153 (11159) : 15 dsy 
average 11151 (111SZ) 


COCOA Sfiorra 


GASO&Sflcmw 


Cash 44659 
3 months 4545-5 


445-7 

4S2-3 


-456 IS3 


450505 

4S&&6 


4534 


14509 



CtoM 

PnSviOu* 

rtSh/Low 

Nov 

16700 

168.75 

1880016650 

Oeo 

18725 

16925 

16825 16700 

Jan 

18725 

789.00 

1 6850 16750 

Feb 

18550 

16728 

16800 16550 



Ctoee 

Previa in 

Htgh/Low 

Dec 

1120 

1134 

11321116 

Mar 

1163 

1166 

1166 1148 

May 

1176 

lie 

11871171 


1198 

1211 . 

12081196 

Sep 

1217 

1232 

1229 1220 

Dee 

1238 

1256 

1252 1236 

Mer 

•1260 

1279 

1278 1260 


Tpmom-2121 (1992) lots oT 100 


Turnover 3G29(Z779) late ot 10 tomes 
(CCO toO u tor prices (SDRs per tame). Daly 
price tar October 26 147002 {1480(8} riO dsy 
average tor October 27 1487.74 (146953). 


May 

& 


6250 

80.10 

7950 

78J0 

7850 

78*5 

78*0 


78.70 

7750 

7850 

7850 

7555 

7550 

7SJ5 


9250 79 50 
00507850 
7950 7756 
79*0 79*0 
7750 7750 
0 0 
7750 7750 


Ctoee Previous MOtyLsar 


Mar 

May 

& 

Jan 


15056 

14750 

14756 

14750 

147*5 

14450 

14155 

14155 


M475 

14455 

144.70 

14555 

146*5 

148*5 

14050 

14050 


16050 14575 
148.15 14450 
1475014856 
1475014950 
1475014650 
0 0 
0 0 
0 0 


COTTON 50500: centapra 


Nov 

<70.1 

4685 

4700 4090 

Deo 

4725 

4712 

4735 4697 

Jan 

475.1 

4735 

0 0 

Feb 

4785 

4772 

478*4760 

Apr 

4347 

483.1 

4665 4825 

Jun 

4905 

4992 

4905 4895 

Aug 

487.1 

4965 

0 0 

Sep 

4600 

480.1 

4610 4610 

CRAM0E JWCE 15000 Bis: OTte/toi 


Ctoee 

Previous 

Htoh/LOar 

NW 

16055 

144.75 

15020 14575 

Jen 

14750 

14426 

148.16 14450 

Mar 

14756 

14470 

1475014525 

May 

14750 

14525 

14750 14600 

J* 

147*5 

145*6 

14700 14600 

Nov 

14450 

146*6 

0 0 

Jan 

14125 

14020 

0 0 

Mar 

14125 

14090 

0 0 

COPPER 2S500 BW OMa/to* 


CtoM 

Previous 

tfgh/Low 

Nw 

8820 

8326 

M9* 8825 

Dec 

8605 

82.15 

8650 8300 

Jwi 

B4.7Q 

8100 

tpjn 8220 


CHtBE OR (Ugtq 42500 unefeniante 

doae Pravlooa fagb/u 

1653 1957 
1971 19*4 
1959 1955 
19*9 1932 

1958 1958 
1950 1950 
18.11 19.11 

1959 1959 
19.10 1950 
1950 1535 


DSC 

1903 

1928 

Jan 

1902 

1954 

Fab 

19*2 

1971 

Mcr 

1925 

1951 


1908 

1952 

m wr 

1920 

19*3 

Jun 

19.11 

1954 

Jfr 

1908 

1928 

Aug 

1800 

19.19 

Sep 

1806 

19.12 


Chicago 


Dec 

183Z 

1807 

183S 1800 

Mar 

1871 

1850 

18741843 

May 

1903 

1882 

1895 1890 

oy 

1934 

1913 

1820 1910 

Sep 

1966 

1944 

1950 1980 

Dec 

1998 

197* 

19901973 

Me 

20B8 

.2004 

0 0 

COffte TTSTOBte; Ca«ttS/to« 


Ctoee 

ftsvlaus 

MCpi/twr 

Dec 

12400 

19?J» 

1240512225 

Mar 

12809 

12608 

1292512600 

M»y 

130.74 

12906 

131O012B76 

Jty 

13175 

13000 

131.75 129.75 

Sep 

13208 

13151 

13225 13100 

Dec 

13400 

13250 

1340013400 

Mer 

13208 

131.12 

O 0 

PUIMMCOtoyact/toyo. 


Ctoee 

Previous 

Hfeh/Low 


90VABEAN Ofl. 6O000 to* cantsflb 


CtoM 

Previous 

High /Low 

Dec 

1720 

1706 

1731 17.18 

Jan 

1708 

1754 

1750 1707 

Mar 

1700 

1708 

17.78 1708 

Mey 

1705 

18.08 

1005 1705 

*V 

18.16 

1826 

1825 18.15 


1025 

1033 

1035 1021 

yep 

1829 

1040 

1045 1826 

Oct 

1035 

1050 

18001035 

Dec 

iaoo 

1066 

18051800 


SOYABEAN MEAL 100 tone; $f»n 



CtoM 

Previous 

Wgh/Low 

Dec 

1800 

1810 

1822 1785 

Jan 

173* 

1750 

17521715 

Mar 

168* 

170.0 

1700 1870 

May 

1602 

1672 

1670 1630 

fy 

182.7 

1640 

1640 1620 


1620 

163.8 

1835 1620 

S«P 

181.0 

162$ 

1625 1610 

Oct 

160* 

1620 

1620 1604 

Dec 

1600 

1625 

16201601 


WHEAT 5500 fait min; OtoMfBObtaMI 


SUIEft 1500 trey oc cenb/voyoz. 



CtoM 

Previous 

Hfeb/tiiw 

tkw 

9920 

8960 

6980 6850 

Dec 

8985 

9990 

70*0 8870 

Jan 

7000 

703.1 

7080 7080 

Mar 

711.1 

7106 

7180 7030 

May 

7200 

723.1 

7300 7170 

Jly 

7305 

7320 

7410 7180 

Sap 

7400 

7420 

7460 7340 

Dae 

7570 

7592 

7380 7520 

Jan 

7827 

998* 

0 0 



CtoM 

Prevtou* 

High/Low 


Dec 

288/2 

296/4 

294/4 288/0 


Mar 


308/2 

305/4 300/2 


May 

300/4 

304/0 

301/6 299/0 


3L 

286/4 

289/0 

287/6 285/4 


Sap 

290/0 

293/0 

291/4 290/0 


Dee 

298/4 

302/4 

0 0 



LIVE hops 30500 lb: cenanw 


auOAII WOftOH- 112500 He; centeflbs 



CtoM 

Previous 

High/Low 

Jm 

705 

701 

703 606 

Mar 

753 

750 

701 753 

May 

703 

708 

707702 

Oy 

709 

7.71 

7.73 708 

Oot 

7.73 

7-79 

7.78 7.73 

Jbi 

703 

709 

0 0 

Mar 

806 

8.16 

0 0 



CtoM 

Pravtous 

Ffigh/Lmr 

Dec 

4100 

4207 

4256 4156 

Feb 

4007 

41.65 

41*5 4055 

Apr 

38.15 

3800 

38.77 38.10 

Jun 

4157 

4102 

41.75 41J35 


<107 

4200 

4205 41.70 

*3 

4a75 

4150 

4lOS 40.72 

Oct 

38.30 

0 

88*0 38.12 

Dec 

3850 

39*0 

3900 3850 


MAIZE 5500 bu min: cents/SBto buatwl 



Ctoee 

Previous 

ngh/Loer 


Dm 

6852 

6073 

6850 8750 


Mer 

0955 

68.05 

6855 69.10 


*tey 

7045 

6075 

7050 03.78 


rjy 

7050 

6X70 

7050 8955 


Oct 

6650 

8550 

66.70 8825 


Dec 

65.10 

84*3 

K50 64.75 


Mar 

68*5 

8855 

6850 6650 




CtoM 

Previous 

rtgh/Lwv 

Dec 

178/2 

179/4 

179/8177/4 



184/8 

184/8182/4 

May 


190/0 

188/8 187/4 

*y 

198/8 

194/2 

194/2 192/2 


193/0 

192/0 

184/0 191/6 

Dee 

192/0 

199/0 

190/0 

197/0 

192/0 189/2 

199/0 197/0 


PORK BSLUES 38.000 a?s; osfrt8|V> 



Ctoee 

Prevtoua 

HJgh/Low 

Feb 

5350 

65*0 

5550.5356 

Mar 

5350 

5557 

5450 5350 

May 

55.17 

5650 

6655 5450 

«*y 

66-15 

5657 

56.10 5555 


KATSka oa. 42500 us gate. pente/US gtota 

Qoee ftraoue Hjgfi/L cm 


Oeo 5556 5734 

Jen 56*0 57.19 

Feb 5575 6639 

Mar 5330 64.19 

Apr 5130 52.16 

May 5035 50.70 

JW 5050 6055 

Jty 5038 5035 

Aug 5150 5075 

Sep 61*6 5135 


57555630 
5650 5636 

56.15 5550 

54.15 5335 
52.10 5130 
5035 5030 
5035 5030 
5030 5035 
6130 5130 
61*6 61*6 


cioeo Previous hegtyuw 

530/4 kS/5 G35flSXfl) 

•tan 538/0 541/4 542/2 535/* 

M» 542/4 647/0 547/6 5*0/0 

“■» 6*4/0 549/4 550/0 543/0 

fY 545/B 551/4 551/0544/0 

A“S 640/0 546/0 549/0 5*3/0 

gto 538/0 5*0/0 586/0 536/0 

N®* 538/6 S3B/2 538/4 534/0 

live CATTLE 40J00tes;cants^to 


Owe Previous High/Lo* 


»» 6030 82*0 6230 809 

** 58*5 60*5 6Q255&8 

^ 61-02 PB> 5236 613 

6132 8232 6240 51JJ 

i 25 2® 61.10 61.00 585 

Oct 5870 0 593556.7 

Deo 6035 6130 8130803 









r 





irketin 


Ifcscasc 


Financial Times Tuesday Nowm ber319$7 

CURRENCIES, MONEY & CAPITAL MARKETS 


FOREMN EXCHANGES 


Dollar hits new lows 


THE DOLLAR continued its 
downward trend on the foreign 
exchanges. The West German 
Bundesbank: Swiss. National 
Bank; and the Bank of Japan 
bought dollars, but the interven- 
tion was generally regarded as 
no more than a smoothing exer- 
cise, to insure the US currency’s 
decline was orderly. 

Nervousness centred on the US 
trade and budget deficits, as the 
market believed the September 
trade shortfall, to be published 
on November 12, will show no 
sign of improvement, white Pres- 
ident Reagan and Congress will 
fail to agree on measures to sig- 
nificantly cut the budget deficit. 

Dealers pointed out that a re- 
duction of $23bn in the budget 
deficit to meet the Gramm Rud- 
1 man target would not really rep- 
resent a cut, after the higher 
budget figure proposed for the 
new financial year, and that a 
reduction of around $40bn was 
probably required to restore con- 
fidence in the dollar. 

This seem s certain to involve 
raising taxation, and Is extreme- 
ly unlikely ahead of next year’s 
US presidential election. 

A test of confidence for the 
dollar is likely to be seen at this 
week’s quarterly refunding auc- 
tions by the US Treasury, 
concern about the level of for- 
eign demand. 

The dollar fell to its lowest 
closing level against the D-Maric 
since January 1980, finishing at 
DM1.7120, compared with 
DM1.7280 on Friday. It also de- 

£ IN NEW YORK 


dined to a record low of Y137.05 
from Y138.35, and fell to a record 
SFrMlSO from SFrl.4295, and to 
FFr6.8050 from SFrS£?26. 

On Bank of England figures 
the dollar's index fell to 98.0 
from 985. 

STEHUNG-Trading range 
against the dollar La 1987 is 
1.7290 to 1-4710. October 
average 1.4620. Exchange 
rate index was wcbanged at 

744, compared with 73k wbt 

months ago. 

Sterling rose to its highest lev- 
el against the dollar since August 
1982. It closed 1.70 cents higher 
at SI.7385-L7896. The pound was 
generally steady against other 
major currencies, rising to 
DM25775 from DM2.9750, while 
closing unchanged at Y238-25, 
and easing to SFr2.46 from 
SFr2.4625, and to FFr10.0950 
from FFr10.1125. 

‘ D-MAJLK -Trading range 
agai n s t the dollar in 1987 is 
1.9806 to 1.7120. October 
average 14011. Exchange 
rate index 1494 against 1474 
six months ago. 

The D-Mark rose against the 
dollar in Frankfurt, as sentiment 
coninued to point towards a- 
weakening of the US currency. 

This followed speculation that 
the leading industrial are 


prepared to see an orderly de- 
cline of the dollar, and doubts 
that President Reagan will agree 
with the US Congress on mea- 
sures to reduce the budget defi- 
cit 

Amid general expecafions the 
dollar will soon fall through 
DML70, it declined to dose at 
nearly an eight year low of 
DM1.7166. 

^ The Bundesbank bou 
940.9m in Frankfurt when 
dollar was flveH at DM1.7204, 
compared with DML7393 on Fri- 

^JaPANESE YKN-Trading 
range against the dollar la 
1987 Is 159w46 to 18746. Octo- 
ber average 14847. Exchange 
rate index 227,2 against 226.3 
■It lEMMlrilM ago. 

The yen was strong against the 
dollar, leading to comments that 
there will soon be an attack cat 
the Y137 level. Bank of Japan 
intervention was estimated at up 
to Slhn, but failed to prevent the 
dollar bHiw as dealers believed 
the Group of Seven now accepts 
the dollar must move down to a 
lower trading range. 

The dollar fell to Y137.60, from 
Y138J35 on Friday. Trading 


limited ahead of today’s national 
holiday in Japan, and this week’s 
US quarterly refunding auctions. 


EMS EUROPEAN CURRENCY UNIT RATES 




Ear 

mnl 

rates 

Cjwg 

Wteat Ea 
Nol2 

%daw 
6sa 
can 1 
ran 

m 

"to?* 1 









7.94809 


*0.74 



9fKHCI 



Fresco Franc 

6.90403 

6.99187 

*127 
*tai 
. *0X7 .. 
*241 

*053 

*13674 

±L5022 

*16684 

*44752 

IrlAPM 

076801 

248458 

O7750B7 

252902 

*013 

♦L81 



115 POUND SP0T< FORWARD AGAINST THE POUND 


STERLING INDEX 



MmX 


030 

an 

746 

745 

9.00 


746 

744 

in no 


746 

744 

it m 


746 

. 745 

Noon 


740 

743 

LOO 


746 

745 

200 


746 

743 

300 

pa —— 

746 

746 

400 

pa • 

746 

' 746 


CURRENCY RATES 



20-1 ^ 

2A9r246% 


179B5-L739S 


1150V1L5U 
1 IliJLl UK 

2.97lt-Z.48lt 

21180-24260 

19B.40-1W.70 

H3cvnin\ 

mro-uuo 

1868-10*9 


2DL9. 

249*42 W* 


v &sz 

84-154c* 


vst 


8W-’ 



Brigbn rate a coamtete 
lUSt-TDcm 


ton. Mi tac 6220-62.90 . 9 m« M teter WSp 12; 


LB 

aw 


150 

am 

521 

■ajit 

ABO 

-3JUJ 

-530 

030 

-056 

4X3 

423 

528 


Had 

Mt 

% 

SpedU 

DoHfan 

toes 

CmTOQ 

Itait 

DOLLAR SPOT- FORWARD AGAINST THE DOLLAR 


SScSttor-Z 

Zk 

0768821 

L33006 

0693232 

L19929 

Mmmtor2 

» 

Chat 

Oacnnte 

% 

**- 

TtejW 

% • 
P*. > 

AuftHao 5c£- 
BeManFiaoe- 
Datehkraae— 
DcnscteMvk 
NctkOrihhr— 
FmcfeRM- 
Kalian IQs — 

NnwyKrMtT. 

4 

y* 

16320 

MM 

145306 

43J62S 

utet 

Detent 

L726O-L740S 

L34Z5-L5545 

33127-13163 

L9220-L9400 

3580-3605 

600506*545 

J3GSL5535 

U08SL7240 

n&tiS, 

L7385-L7395 

13335-13545 

Oi30-OL3Ocpn 

02241*01 

007-010ofc 
0i3W)L33q>a 
. Itopar 

L20-L70omfe. 

022-QLUten 

2J7 

131 

L21-L16pte 

OJS-OCf* 

2J3 : 
L29 ' 

ts : 

031 
-226 . 
116 < 
366 
-6TO • 

t 

228824 

2579)0 

IV* 

WA '• 
182950 

MM . .. 

sat 

. LB9335 
178674 
Sf* 

206290 
232195 
6.99217 
• 151932 
165238 
731279 

Nettobote. 

•4reted-_IZ 

L9265-L9275 
3590-3600 - 
66175-60225 
LS35-L55C5 
L7125-L7125 

235 

•017 

-262 

L36 

352 

-600 

L20-L35pn 

3JO-tOOCb 

: U0^£ 

toadAltiSn 

SMssFnc — 
Crack Dwh.- 
IrMtPw*— - 

s 

a Ec 

pi 

{ST-. — 

Iinwsljmn 


320-6.70Bradb 
UtMOtoMfc r 

-564 

■709 

•226 

-233 

338 

238 

443 

13000530* 
noo-Ltrotb ■ 

L95-25S* 

300350* 

-459 : 

3S 

-Oil 

•CVSOflnKl 

V Oct 30 

U3N2 

kStooSs 

1200-12.134 

LU20L4245 



2JB1 

317 


FINANCIAL FUTURES 


Gilts show little change 


gilt futures were virtually 
' in Oe London Inter- 
national Financial Futures Ex- 
change yesterday in relatively 
quiet trading. The contract saw 
over 15,000 lots traded but this 
was less than half the average 
seen last week and reflected cur- 
rent market uncertainty. 

While there appeared to be no 
Immediate pressure for another 
base rate cut, dealers remained 

iODtimistlc and stfil saw the 
ance of another cut after to- 
blight’s speech by the Mr Nigel 
} Lawson, Chancellor of the Ex- 
Jchequer. 

In the absence of any fresh 
lead, most people were content 


to stay on the sidelines which 
accounted for the drop in vol- 
ume. Gilt prices were little 
changed from Friday, opening at 
120-23 but meeting with early 
selling down to a tew of 120 - 10 . 
Prices recovered on short cover- 
ing up to 129-24 and pe eke d at 
120-28. However values retreated 
once more as US bonds 
in the US on a lower tack 
another bout of short covering 
saw the December contract dose 
at 120-28, unchanged from the 
opening and only slightly 
changed from Friday’s close of 

120-aa 

US Treasury bands were unset- 
tled by uncertainties within the 
market on the vulnerability of 


the dollar and current discus- 
sions u> reduce the US bud 
deficit Many dealers held out lit- 
tle hope for either because there 
were growing doubts about the 
a u t hori ties’ ability to agree a cut 
in the budget deficit of a 
sufficient to allay market fears. 

In addition there was a got 
deal of uncertainty ahead of the 
three-day Treasury refunding 
programme, starting later ~~ * 
ana the level of foreign 
pation. 

The December contract 
at 87-04 and slipped to 873)0 in 
the first few hours before easing 
further after the opening of Chi- 
cago, to a low of 86-22. It dosed 
at 86-25 down from 87-03. 


UFFX LONS EHX FtTTDKS I 


Dec 

106 24.46 2431 000 002 

108 n on nyn 

no 1047 um os2 019 

122 SAB 9JA 002 034 

114 LSI 739 085 057 

116 400 627 024 L25 

III Ui US 134 U3 

ia ia mo is u 

^ «*mr Mat Cab 1999 Puts 432 

tPrarioa rtf's apt* iae Cafe 40319 Ms 29493 




Ktt '000 

hm 000 
2205 OOI 
mu 003 

S5 

582 


an 

022 


OgftspMW: 


Cafe 41 Petl5 
CaH 2637 Pmti 


17000 9.97 1430 

17250 069 1328 

017 17500 7.55 1225 

030 17750 6.49 112)9 

on 18000 056 Tni o 

125 18250 4.73 018 

154 28500 460 833 

240 18750 337 734 

EttkaaMwtaettt*. Cafe 0 Puts 0 
01 PtMteairtf'steMlat: &*64 Pm 168 


PtMat 
ot Dee 
687 1140 

009 12*8 

iSS £2§ 

as ss 


15.90 S3 
17.77 ZL94 


umnomon 


SOS 


m 


■Met 

Ms* 

Dae 


Iter 

tor 

Dto 

Jmi 

Iter 

150 

2300 

2100 



wm 

nm 

OOO 

... .■ 

nm 

155 

1800 

uro 

ULOQ 

mnn 

000 

nm 

008 

8L33 

160 

1300 

l*nn 

1300 

1T0T 

«WI 

aoe 

034 

008 

165 

BOO 

804 

850 

932 

nm 

Oy© 

107 

L97 

L70 

336 

434 

509 

5.92 

a*9 

165 

260 

377 

US 

0.70 

US 

260 

335 

263 

4J* 

537 

640 

130 

005 

034 

U6 

L95 

70S 

735 

833 

980 


■TmlwSWsapM 


tmt Cafe 97 PstsO 
ketew n*l3» 


L45 1290 - — 270 

150 2060 2050 2060 030 030 — 030 

L55 18.40 18.40 1050 030 030 040 

160 13-40 13.40 2240 1240 030 040 060 090 

166 020 860 400 950 030 075 L30 225 

170 150 430 5.40 625 085 LBS 270 3.90 

US LOO L93 290 330 290 435 535 635 

jltailir Ilium IH-1 ftT “*• **— 

Mm feat mm£ Cafe 9B7 P*sl57 


Strife 


Price 

to 

Dk 

JM 

«fp. 

to 

Dac 

Jin 

Mar 

Prfca 

to 

to 

Jm 

a 

to 

to 

Jas 

& 

1650 

760 

800 

83S 

8.90 

005 

1080 

100 

1195 

89.75 

233 

281 

209 

OOO 

007 

019 

1675 

560 

5.90 

635 

725 

025 

inn^ 

165 

220 

9000 

228 

218 

L88 

L77 

000 

Q09 

023 

085 

iroo 

335 

410 

490 

560 

030 

1260 

280 

320 

9025 

203 

L96 

167 

159 

nnn 

012 

027 

032 

L723 

L70 

260 

360 

485 

130 

250 

3J0 

480 

9030 

U9 

129 

180 

181 

nri} 

035 

033 

059 

L750 

085 

LUO 

260 

388 

278 

395 

495 

620 

9025 

134 

133 

LSD 

125 


019 

080 

068 

2-775 


105 

205 

250 


5JO 


7.75 

1 m 

m 

L3 

2J2 

109 

CUB 

024 

0.47 

077 

2.800 

015 

065 

185 

220 

700 

725 

— 

980 

9125 

108 

125 

a« 

0.94 

BIK 

031 

056 

067 


P ink a towe: 

LONDON 


Cafe L76Z Pats 733 
CSb 1«,9« PWs 77,806 


CafelrtfeB 
0820) rm (2209 


CHICAGO 


unuan 


rmm 

aim 


(can ix 


JAPANESE YEH (BN) 
(UJatlvnM 


Dec 


12043 Zs££ 12010 
120-23 12024 120-16 


S& 


Cateaa d W ate w 1504631180 

iWihL 25710 (23999) 


SMB Yuan IMMsaOMX. 


Pm. 

10047 lfl5.fi 

104.97 104.97 104.97 10500 


it W5L40 MUO 


Dec 


85-30 86-11 85-26 

85-04 asm o 
0 0 0 
0 8W3 8323 

0 
0 
0 
0 
0 


87-26 

66-19 


07291 0.7?$ 07277 07254 
07 351 07351 07343 07315 
0 0 0 0.7315 

0 0 0 07437 


•4-13 
8326 
83-09 
6225 
8200 
8128 
8L28 
HI 15 


Ojae 


•pdf" 

Bate" 'Hldi lav Pres. 

05837 0 05830 05SU 

05837 05894 05885 05858 

0 0 0 05910 

0 0 0 03962 


iHm-tmmiMi 

Qaplflim 


town 


TBB 

."S25 sr 



to 

to 

Oto 

95.94 

«a 

JSS 

9932 

Its 

93.94 

9381 

ho. 

9412 

ms? 

Ok 

Ctose 

9232 

9 St 

bar 

9227 

9260 

9128 

4164 

9067 

90.72 

0 

Pvt*. 

92-42 

to 

to 

Jm 

s? 

to 

9091 

9LOZ 

9069 

9062 

90.76 

9uS 

9108 

90.93 

9064 

bar 

9068 

9097 

9066 

9064 

Pm. 

90.90 

9095 

9060 

9074 

9060 

Jm 

& 

to 

9293 

9266 

9282 

0 

92.99 

0 

0 

■ 

92.93 

92*6 

9282 

O 

9964 

92.71 

9285 

9221 

to 

Dec 

to 

Jm 

to 

9132 

9107 

9068 

90.72 

0 

9136 

900 

9069 

0 

0 

9L74 
9138 
41 11 
90.90 
9039 


■ M. 19256(19530 




Dm 


CURRENCY MOVEMENTS 


*»2 

BaM of 

tow* 

Camay 

CtaMnK 

fft „ 



USMtar 

Csnaif-Mi Doter — 
Austrian ScMHag — 

986 

77.7 

1408 

+106 

Dan* Krone — — 

Deutsche Iter* 

910 

1449 

1773 

♦22 

♦238 

♦243 


FrcadiFiMEtoMto 

716 

-138 

-189 



♦703 

vJSSKSim 

S3 

wrage 1980- 
OEto Amagt 


1975-100L 


EURO-CURRENCY INTEREST RATES 



Tta» 


OTHER CURRENCIES 


No»2 



two Ojl DOOCE 

EXCHANGE CROSS RATES 




6.9930-7.0640 

25495-25525 I 
962760-966140 

75055-75185 | 

23040-234301 
13.4600- 13 5600 
11920- 

137380-138625 I 
087790-847830 
6245-6255 | 
A 4235-4. 4575 I 

289600285780 

26650^87501 

6487V6A930 

35550-35855 

24260-14420 

5.9625^1750 

5L75-E60 

63535-63990 



761007 
7020* 

1 79810-804.70 

027625-OZ7635 

I 35.90-36.ro 

I Z50B0-25090 
164400-164860 
11*640-1*695 
17500 3.7510 I 
120650-2 0660 | 
L9650-L9 


29.90-3060 

26725-^6738 


•Saffian rate 


Mm2 

n 

BN 

a 

□ 


03 

D3 

ra 

El 

BPc. 

Spa l-att. tote. 6*te Uj* 

1 17390 L7359 L73M L7272 L7215 

£ 

S - 

i 

0375 

V 39 

RTT1 

El 

Kuo 

5605 

2880 

1815 

3350 

L9Z7 

□ 

e 

6230 

3195 


DM 
. 701 

0336 

4197 

0384 

7299 

i 

U50 


3390 

CUT 

1^1 

1225 

1866 

□ 

0767 

9387 

2099 1 

2623 . 


Ffir. 

Sft. 

a%7 

L723 

8707 

ISI 

2366 

9665 

M . 
420* 

-2887 

m 

217*. 

MLS 


6L91 : 
2581 . 

HFL 

Lfca 

Jjjj 

0319 

ajw 

0889 

L357 

7122 

1086 


0734 

1221 

i 

1327 

i'L'J 

LJ 

1866 

2889 


On JM Lmt Pm 

Dm 27390 L»S 17252 17187 

MV L7215 - - 17177 

S i 121*5 - . 12080 

Eflte*adatm»SI50 

fl 



1304 

4.764- 

1043 

3812 

4820 

1625 

1677 

8936 

1867 

5360 

FI 

i 

3*54 

2736 f 
m i 



XO& 


Law hi to 


Cte IM Low Pm. 
07071 Ojefj 87050. 07026 
07136 07143 0712S 0.7093 
07210 07210 " 0 07161 

0 - 0 - V 0.7225 


O 0 25955 

0 0 26080 

0 0 26275 

0 0 26630 


V030 175.40 
- 17290 


1459 3741 
■ tat. 8711 (9MB 


ittimx 


DK 

Oesc 

9228 

<zt 

Lour 

9226 

Prti 

92JD 

Mar 

9269 

9222 

9269 

9230 

Jm 

91*5 

9174 

91*6 

9178 

Sap 

9132 

9180 

9179 

9138 

to 

9166 

• 

M 

9169 

to 

9089 

M 

• 

90.92 

Jm 

9075 



9078 


aJVatert 5U B8Q9 
sHqrSopca hL 37028 C371 <39 


111 100 % 


rar 


8® aiS 


K7-CB 

16-04 


I MM 5750 7352 

apt* 64.13207 02X2} 


CURRENCY FUTURES 


money markets 


FT LONDON INTERBANK FIXING 


UK money rates 
ease slightly 


aLOOua. Ho«2) 3 i 


EUS 


bM 75* 


Hi Vt 




iWllTOi 


Interest rates were marginally 
lower in the London money mar- 
ket yesterday. Sterling remained 
firm and traders were expecting 
an encouraging response from 
tonight’s Autumn economic 
statement from Mr Nigel Law- 
son, Chancellor of the Exche- 
quer. - 

There were real hopes that 
public spending as a percentage 
of total income would be reduced 
and at the same time leave the 

UK clearing bank 
Kaon Ending rate VA per cent 
from Oc tober ZB- 

Chancellor sufficient leeway to 
introduce a significant reduction 
in personal taxation in next 


In addition markets werr stfil 
looking for another cut in desir- 
ing bank base rates, with some 
suggesting that a fall today in 
West German intervention rates 
would pave the way for another 
half a point cut to coincide with 

the Chancellor’s speech. 



one month out to one year ata 
rate significantly below the fm 
p.c> base rate leveL Three-month 
interbank money ™ qu«ed at 
9*-9Vk pic. compared with 9*6- 
9$k p-c. 


. The Bank of England did not 
give any assistance in the morn- 
ing which was hardly surprising 
because discount houses were 
picking up bills at around 9 px^ 
while the authorities were still 
dealing at 9% p.e. 

Overnight interbank money 
opened at 9$fc-9% p c. and moved 
up to 9&-10 p.c. as there was no 
help given in the morning. In the - 
afternoon rates touched a low of 
6 p-c. after the over help but late 
balances were taken up to 9 jws. 

The Bank forecast a shortage 
of around 5250m, with factors 
affecting the market including 
repayment of any late assistance 
and bills maturing In official 
hands together with a take up of 
Treasury bills draining £565m 
and the unwinding of previous 
sale and repurchase agreements - 
a further 5571m. These were 
partly offset by Exchequer trans- 
actions which added 5375m and 
~a' fall in the note circulation of 
5520m. In addition banks 
brought forward balances a nom- 
inal S5m above target 

The forecast was revised to a 
shortage of around 5200m and 
the Bank gave no assistance in 
the morning. 

Assistance in the afternoon 
comprised outright purchases of 
y.iQ5^ n of eK gihfe bank bills in 
band 1 at9% px. Late help came 
to 5155m. 


MONEY RATES 


NEW YORK 

(LundiHraeJ 



OMMMte- 

TtfOMy BBfc Mtf Btetds 

■ 427 Hmuml 

nnn 

960 

ThneoBtek 

nS . 

RM 

860 

Smart— 

639 Stan]**- 

— US 

650 

694 

tojar-. 

Tmjmt— 

689 IQjto— 

770 30 mm 

961 

915 


Dm2 


to 

Mott 

FI 

El 

mSto 

E3 

Fratetert 

J*W70 

3*0-375 

3.90-410 

4TO-415 

476-475 

560 

art* 

.JH 

E^l 

7t«4 


«w 

7*1 

To** — 

Ufa 

m— * 

t m3? 

3.90 


~ 

m 

■ 

EE 

IhMhh 




*r9* 




LONDON MONEY RATES 



Loe*4 

Local EB 

p [i iii NB 

Coopht EcmdbNi 

bSmsOW—ZJ 

FkrTnrit B& CBg) J 
SDRtMcdDw^l 

ECU UrtW Spate 


OvenVL 


1A5-7JD 

93JS 


9150X75 

950-425 


vis 


9375 

4625 


OM 


438-475 

4375 

425 

9.438 

400 

4315 

4313 

4063 

49 

4B2. 

735-730 


Urn 


438-425 

425 

925 

9.438 

273 

4375 

4375 

W 

was 

755-760 


Sbc 


938-43 

425 

433 

4438 

*625 

4375 

4375 


450 

7 JO-765 


0* 


4375 


4375 

4375 


aisaoo 


— j“mmm.-imi ■nmtiiiti : “-“i — r - - } , — ~jr~ 

EK Owe MHlH BR par CHC-Tnmn BID; Jjmetetor no c« dhow 9L785B p& ETSD AadM 
SSfiw E«w Rbmm. Ihte ■ 4m Sato 30. lW.Awd ate far period W— te g 25 m O un to. 



39 


The London Inlemational 
Financial Futures Exchange 
Royal Exchange. London EC3V3PJ 


For turtter information contact 
Sandra Stoeio on 01 -623 0444 ext. 2157 
Tetsc 893893 ItfTEG Fox 01-588 3624 




C; 





Starts 

trading 





YOUR FUTURES IN THE 


PALM OF YOUR HAND 

FUTURES PA6Ht=== 


PRICES UPDATED EVERY 5 MINUTES 24 HOURS A DAY ^ 
OPERATES WITHIN 40 MILES OF THE CITY y 6 MONTH 
CONTRACT * EXCHANGE FEES RAID p FURTHER DETAILS 
TELEPHONE 01-6230071 OR WRITE TO FUTURES PAGER LTD 
19/21 GREAT TOWER STREET LONDON EC3R 5AQ 


£474 

PUSMT 

' KTXfXMMt ■ POWtSS 



LG. INDEX LTD, 9-11 GROSVENOR GARDENS, LONDON SW1W OBD 

Tab 01-828 7238/5689 Reuters Code: IGtN. IGIO 


FT 30 

No*. 1332/1347 >28 
Doe. 1324/1339 -41 

Dnfinfftoan toni 9m to 9pm. Prices tekan at 5pm. 


FTSE 100 WML STRE E T 

Noa ^ 1715/1730 -28 Nov: 1980/2000 -40 
Dec. 1705/1720 -48 Doe. 1985/2005 -40 


£world value of the pound 



\2 1987 . b i 


ntoC4)KV 


w OSES to nta b MnboL Mariut nta « ta 
tan One of fnneigo amedti to wUdi tbqr an 





PWuaNewGteMi. 

rate. OPRO fc y_m!griv agjMr» * tokw t iMBirUnm 05HltoaA*Mo yfeeter to WK oSbamjttm cunqf Wndwrt MUil Wto o rt h lm ProtUei 1 jwr. CPMigtelM tm to 
iftHa huodnd QctaKr UiW. 


Trade Indemnity export credit enstrance. m -39 9939. 


<1 


x 























































Financial Times Tuesday November 3 19K7 


WORLD MARKETS 


FT UNIT TRUST INFORMATION SERVICE 


FT- ACTUARIES WORLD INDICES 


Jointly compiled by the Financial Times, Goldman, Sadis & Co., and Woo^TMackenzie & Co. 
Ltd., in conjunction with the hastttnte of Actuaries and the Faulty of Actuaries 


i 


AUTHORISED 
UNIT TRUSTS 


8E8IQIML MARKETS 

Figures in parentheses 
show number of stocks 
per groping 


MOMMY NOVEMBER 2 M87 


Dai's Pound 

Change Storing 
% I octet 


FUMY OCTOBER 30 3987 



1987 1987 

High I Law I (appeal) 



Europe (9091 
Pacfflc Basin (680) 

Euro- Pacific 0629) 
North America (711) 
Europe Ex. UK (616) 
Pacific Ex. Japan <2221 

World Ex. US (1832) 

World Ex. UK (2062) — 
World Ex. So. Af. (2354) 
WorM Ex. Japan 0957?- 


The Wbrid Index (24151- 




8533 
UX86 
7932 
134.44 
105.95 
23135 
10144 
8633 
12454 
95J1 
13014 
12239 
10566 
8531 
432 I 322.98 
351 102.99 






171 tO 

104.93 

35068 

36022 

nm 


161.28 
19364 
42259 f 99.72 
13141 94.77 

138.99 I 83.93 



9965 
33742 I 9263 










-*tn 


£E 



11502 +1.9 


Bnolws Dee 31. 1966 - 100 

Oqeri^L The Randal Tboes, OcUmo, SadaACo, Wood Itacfcamfc 6 Co. LHLL987 
Batata udfredi nortats dosed tar puMc holidays on NoreaOer 2. 

Hew Yorle nMdHd«1M0 In October 30 4 1430 Or* tool fern Narrator 2. 


EUROPEAN OPTIONS EXCHANGE 


2.40 | 112.97 | 9766 | 104.74 | 139.73 t 10050 I 9459 


BASE LENDING RATES 





12 7 

30 1260 


SILVER C 
SILVER P 


mi 


24 


JuL 88 


3 5 



RJ7J0 
FL5960 
FI 2>8.S0 
FIJI? 


5% 
V* 
9t 
9l 
9a 

InM 9a 

tary Matte 0i 

ASZ Baikiog (ran 9* 
Aswan C 4 Cop— ID 

Adkriy&C&LXl Vt 

fandeBlao 92 

SakHand* 0a 

taklrodlUN 0, 

SctCreffi & CM 5% 

BteofCjm 0, 

Mud Mad 9a 

BakofMa 9a 

BahrfSattad 9a 

BnpBtii'Ud 9* 

totUpB Mk 

BntericTalid.— 0, 
MtitiTndUd — 11 

feifarSttAG 9a 

M8kellWEzi 9a 

• Smash* r 0* 

BstaaHgeT* 10 

CLMNnMed 9a 

CatrdCvU 9a 

tear IN - ■ % 


9a 
9t 

QOlhnhatsBak — 9a 

C&dattrBte 

Csaa.Bk.IL Eat 0j 

9a 

OMewdheBak * 0j 

CjprasftMarBk— 9a 

Datalaate - 0, 

EqiatYl TaC'ppfc 10 

EaterTndLld. 10 

FMri6Ctt.Sa — 94 
fww.HLCBp— _. 2®j 
RBtaa.SK.tM ini 

• sSCcl_ 9 1 
Boben F iatiLPM — 10^ 

(Made 0* 

GiMasBak »2 

• htasUu— _ 02 

HFCTna&Sadw 9a 

• HafcroBak 02 

tonUe6Gea.TsL— . 02 

• WBSaM < 02 

&Ht40i — . 

02 

16)633* 02 

MoMh&SaaLM 94 

HMM 9i 

• MagaEradd 02 

MtCRdtCaLM 10 


02 
9a 

RsAnBaklld 0* 

MnteGKTnBt % 

IB 
11 

LfepMUM 9a 

W«0eCMae — HP, 
BDjdBkdScndM— 9t 

ftMTnstBak 0, 

Sett Modi Sts — 02 
StaMOattad— . 02 

TS8 02 

DOT Urine 011 

IhMBkofKaril 9fe 

Udttd Ha6t Ball 0, 

(UhTnetPLC 0* 

WtshaTnR 10 

WedpaMLCan 02 

WMn^Uidrir HI 

YatafttB** 9a 


• Hesters of Me Accept*? 
Howa CronKM. *7 4a 
deposits 5%. smewtw 7 66%. 
Top TVr-£2^00+ * 3 mods' 
notice 931%. At a* wtaa 
CLfMWH- m aw droadt a d. 
IMMpee base «t (DeOTl 
depot 449%. Mortaae 
11025%. 


t r 


- 7 I 




01-50^1815 


i \x\ I 


Ri 


i 


far 


f|g§ 


12 I .460 
60 1 650 

520A 
530 
460 


24 1 4JD 
8 { 1230 


128 5.40 

75 14 

13 12 

24 920 


13 | 520 
105 1320 



42 540 

13 1650 



TOTAL VOLUME IN CONTRACTS: 26.958 
A«Asfc B-tUd C-Ufl P-Pot 




PUZZLE No 6,472* 


SveDsk^ompaQFlld 

< Thg man whn makes no mis takes 
does not usually make anything” 

BISHOP W C MAGEE 

MEMBERS OF THE STOCK HX CHANGE 
A MEMBER OF THE SVENSKA HANDELS BAN KEN 0*0 DP 
For tanker dads jteme all Ridwd Sana or Sfepbes Cook a* <1 377 606& 
OrwritouSwulaA Crmv Lid. MDeroatidniRoa,LaDd6aEC2M4Ea 



ACROSS 

1 The heart of employment 
activity? (9) 

6 A service returns. Tea is pro- 
vided 

9 No century in cricfcet, being 
put in ? (5) 

10 Rhythmical account with 
lively tone in order mainly 
<8> 

11 On course for the classics 
next season? (3-4-3) 

12 Trust House, first class, one 
in the Country (4) 

14 Giro claim to style (7) 

15 Counter-attack fully 

developed about drunken 
sot CD 

17 Draft could be (soldiers may 
be?) (5, 21 

19 Place in Canada where crag 

20 Abou^tervU^nUieart of 
friends (4) 

22 Hand out underworld testi- 
mony (10) 

25 Man and French ever would 
be supportive of link with 
Europe (9) 

28 Impregnate with dye? (5) 

27 Man who found end of astro- 
nomy filling a gap? (5) 

28 Very fetigaed having given 
more than required (0) 

DOWN 

1 Meat— for more than one 

person? (5) . 

2 and 21 Tax protest (not in 
England, though) (6, 3, 5) 

3 Enter somehow with a metal- 
lic sound, begging (10) 


4 One of the Myrtaceae provid- 
ing theme of 2 and 21? <3, 4) 

5 Fish— mainly crab and sole, 
could be (7) 

6 Non- vo Iconic eruption (4) 

7 and 16 Financial crash that’s 
a matter of history (5, 3, 6) 

8 This business has overheads 

(9) 

13 Game of minimal movement 

(10) 

14 PhJD. student with money 
recreated fluid in the ear (9) 

18 see 7 

18 Precise money raised ton 
card game (7) 

15 Exclusive group with 
' resting-place by lake (7) 

21 see 2 

23 Mate strenuous effort right 
beneath the river (5) 

24 Member of acclaimed 
empire many years B.C. (4) 

Solution to Puxsle No 6,471 


GRANVILLE 


SPONSO.RED SECURITIES 


K 




jE. 







8MW57B 

SUM — I us 


M 1 1 1 . L ‘ f V. r" - 





MW Low Company Me* 

206 133 Ass. Btit. Inti. Ordinary 201 

206 145 Ass- BrtL Inti. CU US 201 

41 32 Arm fa ge & Rhodes ■■ — 32 

142 65 BBS Design Group (USM) 65ri 

188 108 Barden Group 373 

186 95 Br*y Technologies 17M 

281 130 CCL Group Ordinary 270 

147 99 CCL Group 11% Con*. Prof. — MO 

171 136 Cvbonmdmn Ordinary — — 166ri 

• 102 91 Carhormdutn 75% Prcf. ___ 102 

180 87 Beo^eBIrir 168ri 

143 119 Ids Group — 100 

104 59 Jackson Grtsop ... ... 304 

780 350 MuttlhouseNVCAnxtSB 350 

81 35 Record HakOnpi <SE) 81 

114 83 Record HMgs. lOpcPf.CSE) 114 

91 60 Rotwrl Jenkins 60 

124 42 Scnittom 124snS 

224 141 Torday A Carlisle 220 

50 32 Trovlan Holdtags 50s 

131 71 Urdlock Holdtags (SE> ... — ... 71ri 

264 135 Waiter Alexander <SE) 200* 

201 190 W.S. Vases 200 

175 96 West YorlCL tnd. Hasp. (USM) 154 

SecariUes desMmntad (SE> and (USM) arc dealt in 
re gu l ati o n s of The Stock Exchange. Other securities 
subject to the rules of FI M BRA. 


Gross 
Change drip) 

— 73 

— MjO 

— 42 

-4 2a 

-Z 2.7 

-2 4.7 

— 113 

— 15.7 

-a 3.4 

— 10.7 

— 3.7 

-3. — 

— 3-4 

—30 — 

-i oa 

— Mi 

— 53 

— 66 

+e as 

-1 28 

-5 5.9 

— 174 

— 53 


YWd 
% WE 
36 123 
5J0 — 

13a 43 
32 104 
23 296 
28 136 

43 6.9 

522 — 

32 144 

103 — 

22 43 

33 113 

— 13.9 

— 164 
124 — 

— 26 

44 49 
36 107 
13 46 
3.9 133. 
3LO 143 
8.7 200 
36 263 


abject to the roles and 
listed rime are dealt la 


Granville & Company Lhnltrd 
8 Lcvai Lane, London EG3R 8BP 
Telephone 01-621 1212 
, Member of FIMQRA 


GranviQe Davies Colonao La nltoJ 
27 Lovet Lane, London EC3R SDT 
Tde^woe 01421 1212 
Member of the Stock Exchange 



•r’l 




'&3[ 



ay 



WESTMINSTER 

The Financial Times proposes to 
publish a Survey on the above on 

FRIDAY 11TH DECEMBER 1987 

For a fhll editorial synopsis and details 
of available advertisement positions, 
please contact: 

Brett Trafford 
on 01-248 5116 

or write to him at: 

Bracken House, 10 Cannon Street, 
London, EC4P 4BY 
Telex: 8954871 

FINANCIAL TIMES 

EUROPE'S BUSINESS NEWSPAPER 



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Financial Times Tuesday November 5 1987 


LONDON SHARE SERVICE 


BUILDING, TIMBER, 
ROADS — Cont 

UMSlJSf 



DRAPERY 


z» 

367 
201 
252 
1« 

*135 
B4 
1» 

228 95 

•302 114 
437 357 
16ft 99 
295 73 

355 2» 
315 IS 
295 148 
143 68 

<35 M 
461 20 
£206 
IS 1100 


•486 
83 
74 
180 
470 

& 

225 

655 
610 
1« 

81 
240 
£44 

747 
1B3 
35E 
436 
148 
•82 
Q6fl 
244 

290 

264 
405 
278 
337 
13 

48 
•392 170 
306 182 
143 63 

IS 75 
9B 36 
512 266 
326 174 
135 TO 
in sz 
15* 
jfl* 

230 95 

265 163 

*115 16 

285 160 
265 170 

113 50 

27Sj u>3 
300. 1% 
195 46 

139 59 

65 41 

86 50 

182 80 
64 30 

•585 247 
78 45 

585 425 
2(5 150 

291 105 

264 170 
Z15 105 
176 98 

Z70 55 

86 48 

508 289 
£28* 

504 
IS 
zu 

277 
123 
132 
455 
37 
233 

114 
667 
251 
178 
370 
297 
104 
195 


AND STORES — Cont 

I Frka W Sm IpirlSlW 

Li lull'd ]j jjj 
28 25 mo 
42 13 261 
U 24116 

LO 84 at 

3.4 18 98 
25 25 222 

42 129 
18 158 
34 12.9 
75 - 
U 11 - 
&1 U 2U 
W 18 - 
23 25 SJ 
45 2.9 10.9 
23 38 lit. 3 


INDUSTRIALS — Continued ! 

153 




450 
122 
217 

308 M 

3 
1 

l 4 


as 

216 — 

78 -l 
MO — 

79 -1 
sa -l 
190 1-3 

to 

40 


38 16 225 
38 28 132 
** 22 138 

29 75 63 
19 4.7 17 A 

27 25 207 
1.9 58 122 
9 45 * 

1.7 20 118 

30 2A 187 
03 m — 

* or 4 
46 U 17 J 

61 L9 193 

113 M — 
51 15 
51 17 158 
— 12 — 
9 11 0 

32 12 145 
25 31 188 

2.4 45 <9.9) 
55 U 153 
« 08 * 

24 26 218 

4.7 0.9 
23 21 
16 36 
70 — — 

2.7 22 230 

62 LO 183 

3.4 21 155 

15 «5 226 
18 13 XJ] 

* 90 • 

46 25 128 

- 46 - 

25 44 126 
0 3-7 6 
22 22 228 

- 125 - 
22 42 ISO 
45 12 312 
41 14 238 

26 U 166 
38 0.9 393 

28 23 221 

16 61 142 
55 38 6.7 
28 43 129 


657 
205 

441 

155 113 
388 190 

66 B 
480 108 
406 145 
193 88 

£45* £21 
109 57 

68 a 
87 72 

£U 579 
129* 

m 

408 

oa, 

134 
£26 
335 

890 
454 
321 

276 

156 
£3B 
360 131 
106 23 
036 £11 
06* £10 

277 224 

220 159 
111 60 
258 136 
173 75 

185 92 

354 165 

TO 40 
47 18 

MB 73 
256 195 
348 189 
£M6>, £93 
167 98 

285 1QB 
13 B 
191 S 
378 263 
1Wl 50 
60S 125 

265 1H3 

332 260 
227 66 

6» 328 
275 80 

399 245 

S 55 
79 

£23* £11 

IS 3 
206 108 
158 95 

63* 29 
«T 215 
104 56 

220 MS 

no* m 

160 75 

300 150 
TOO 3S 
TO' 31 
332 158 
355 188 
890 436 

236 » 

555 ZB 
355 241 
480 385 
202 155 
SI 335 
339 185 
360 IS 
S77 400 
481 ZZ7 
103 66 

•MB 75 
500 295 
171 U 
IS 51 


4.9 0 

33 23 Hi? 

38 M 168 
M 12 814 
27 48 HU 
07 75 


- — 19.9 

32 L6 278 
55 22 112 
03 28 - 
03 81 — 
58 IA 117 

- - mo 

72 12 Mi) 
L6 52 150 

24 3.4 14A 
0 23 0 

- 44 — 

33 33 12.9 
28 0.9 542 
48 28 137 
0 13 0 
0 13 0 

25 52 10.9 
25 42 W 
55 03 453 

0 20 • 
58 U 20.7 

62 U 

- - 36.9 
28 24 155 
28 58 122 
10-1 L3 88 
25 43 007) 


U ZL4 
U 22.9 
3-9 — 
U 16.7 
2-1 233 
23 - 
20 0 
55 93 
0 17 0 
14 52 198 
12 51 11.9 
U 25 314 
U U101 

24 3-4 12.4 
7.4 08 253 
23 48 158 

52 16 172 
38 28 141 
36 2.9 138 

35 49 136 
05 38 - 
48 23 126 
- 03 - 
22 68 27.7 
2.9 22 228 
0 52 9 
54 23 16.4 

25 65 85 
43 18 142 
43 25 12.7 
16 42 212 

36 48 112 
35 17 22J 

M2 - 

15 245 

16 118 

35 115 
2.4 - 
16 55 14.4 
42 12 278 

0 48 0 

ai 14 08 
4J 08 347 

67 V 58 
33 23 182 

25 36 133 

68 22 95 
28 2J 225 

ii£S 32 

53 17 M2 
18 46 TO5 

K im zbj 
57 153 
35 92 28 
0 05 0 
43 ZJ 13.7 
46 28 158 
24 07 — 
27 43 119 
45 13 219 
48 13 257 
23 39 137 
— * - 

36 19 203 
— — 177 
37 22 172 

0 18 0 

£5 19 Z17 
14 3.7 257 
62 09 213 
22 46 138 
42 08 39.4 

20 162 
15 - 
02 — 

A 05 0 
07 — 
3.9 03 - 
0.9 73 217) 
42 19 176 
15 07 143 
— 19 - 
18 13 — 

ins 05 219 


52 03 — 
17 73 
17 207 
16 162 
65 38 
05 — 
19 127 
12 - 
M8 - 
4 62 4 
37 ID 10.4 
37 43 7.4 
26 42 85 
28 54 92 


AISLL 


25 1 23 [208 

♦ « 4 


26 26 ZU. 
3.7 20 128 
38 U 196 
22 52 122 

4 1 U )U 
19 0.9 328 
32 38 146 
72 12 138 
4.9 18 122 
32 25 172 

11 64 ola 
32 13 298 
4 13 4 

42 11 248 
34 46 89 

£8 4 


56 155 
17 ULO 
54 118 
74 - 

£ 12 sta 
66 69 235 
28 22 235 
33 24 174 
23 48 128 
02 58 — 
68 U 184 
25 36 136 
15 38 274 
23 69 214 
25 33 164 


18 45 158 

* « 4 

26 34 155 


182 
139 
335 
B45 
281 
•m 
m 

11 7 
£2ZP 

153 1113 

176 56 

239 154 
321 196 
70S 330 
360 180 

•ZD 33 
IS 47 
550 MS 
138 (6 

93 58 

148 a. 
a 33 

154 95 
04 244 

rra isl 

580 312 
US 95 
378 232 
246 USE 
a 43 
630 377 
na 79 

234 95 

115 47 

*208 185 
137 78 

2M* 157 

52* 32) 
205 102 
358 184 

324 U 
*179 W 

116 67 
a 35 
59 2S 

235 89) 

121 a 

an 89 

389 236 
TSIh 101 

118 sr 
312 189 
75 3E 

278 174 
215 69 

157 59 

•m a 
a i9 
281* 160 
368 215 
*286 IS 
157 » 

9* 61 
383 15 

92 40 

645 287 
2(0 119 
223 IS 

sr 

3 1 




<950 59 

499 210 
£21* 06 
2M U3 
263 128 
386 160 
10 86 
243 t* 
65 32 



SSI'S 

340 MO 
*M IS 
416 250 
240 111 
£550 EJ» 

329 182 

259 145 
730 3D 
300 192 

g ^ 

330 50 
435 2M 

50 15 

515 290 
112 « 
273 160 
56 17 

291 H9 
237 D5 
170 48 

28J 28 
5TO 285 

*2B za 
366 86 

2« » 
191 100 
405 279 
253 135 

260 US 

208 93 

IS TO 
*238 115 
375 253 
204 98 

300 167 
396 225 
1» 47 

495 270 
■321 153 
358 215 
*M 25 
*322 166 
*44* 271 

S Vf 
440 22B 

cm £27 
43L 242 

157* 66 
809 566 
MS 9J 
195 112 
435 150 

377 an 

378 206 
95* 48 

330 230 
IS a 
193 122 
308 DO 
177 a 

an to 

369 257 
UN 27 

* 15 

S am 
a 

485 328 
105 42 

999 560 

S3 j! 

syss 

a* 2 ?? 

135 47 

260 161 
£28 08 






























































































































































































Financial Times Tuesday November 3 1987 































































































































Actant DesSi| Dates 
Opow 

•Fist Dtdua- Lut Mam 
Hwfaii linn DctfaB Dq 
O ct 26 - Nor 5 NwT Nsr.16 
Nar9 Nw» N*20 Nw30 
NhB Dk 3 Dec 4 Dec 14 
•Hw* tbn» Jwfcaa may Mm pteM *T» . 
MWa Hwo i ii Mw rli « — »r . 

THE UK securities .markets 1 
maintained the more optimistic l 
mood shown at the end of last 1 
week, although investment inter- 1 
est was restrained by the uncer- 1 
tain ties still hanging over the ; 
global markets. 

The expectations of another 
cut in domestic interest rates 1 
were again damped down by the 1 
Bank of England's unwillingness 1 
to respond to an initial dip in 
money market rates, as well as 
by the continued firmness of the 
pound. 

"The UK authorities are un- 
likely to trim rates again unless 
it is pert of a general interna- 
tional strategy was the consid- 
ered view in London. 

On the domestic front, the ses- 
sion passed without incident. 
Turnover in equities was sharply 
down from recent levels. The 
withdrawal from both gilt-edged 
and eurobond marketmaJting of 
Orion Royal Bank, subsidiary of 
Royal Bank of Canada, left the 
securities markets unperturbed. 

But the City is poised for the 
Autumn statement on the econo- 
my which is due today from Mr 
Nigel Lawson, the UK Chancellor 
of the Exchequer. 

The FT-SE 100 Index ended a 
net 26.1 lower at 1723.7, not far 
from Us opening level and show- 
ing a 12 point rally from its low- 
est leveL 

The settlement operation for 
the last equity market account, 
spanning the calamitous week 
which commenced with Black 
Monday and saw the London 
share market tumble by more 
than one fifth, passed off with- 
out tremors - although the City 
has to wait until mid-week to 
'see if any cheques bounce”. 

With hopes of a further cut in 
UK bank base rates subdued, 
Government bonds shaded lower 
as traders awaited the outcome 
of this week's S23.75bn auction 
of US Federal securities. While a 
largely routine quarterly opera- 
tion in the New York market, the 
Federal funding will be eagerly 
scanned elsewhere because of 
the uncertainty over global inter- 
est rates. 

UK bonds ended with losses of 
about Vi without attracting much 
retail Interest. London traders 
were nervous of reports of a bear 
squeeze in the New York bond 
market but benefited from a firm 
close in the London close in 
bond futures. 

There were a few bright spots 
in the equity sector. TSB (Trust- 
ee Savings Bank) ended firmly 
as the bid for Hill Samuel cleared 
its remaining hurdles. 

The international stocks were 
mostly easier, with Imperial 
Chemical Industries and 
Glaxo unable to sustain the re- 
coveries staged at the end of last 


LONDON STOCK EXCHANGE 

Government bonds and equity secto 
sesejss? cautious trading session 

tw • Icwev. -m 


The level of business In BP old 
and new shares was described as 
"disappointing* by a leading 
trader in the shares. The partly- 
paid stock opened on an easier 
note and slipped back to 80tep at 
one point, before recovering to 
end the day 346 off at 81tep as 
the “man in the street’ contin- 
ued to chase the shares. Volume 
in the new approached 100m 
shares, compared with Fridays 
debut turnover of almost 2Bum 
shares. „ „ _ 

BP “old” closed a net 10 off at 
257p with some 12m shares go- 
ing through the SEAQ system. 
Traders reported numerous 
switches from the “old” to the 
“new" shares. 

News that the Gas Consumers 
Council has passed on a number 
of complaints from industrial 
consumers to the Office of Fair 
Trading triggered a flurry of sell- 
ing of British Gas shares which 
retreated to 142p at one point 
before settling a net 6 off at 
146p, after a turnover of over 
12m shares. British Gas de- 
scribed the referral as “complete- 
ly unnecessary*. 

Dealers reported an extremely 
quiet session In the financial sec- 
tors. The big-four banks drifted 
easier. But Bank of Scotland 


FINANCIAL TIMES STOCK INDICES 



worries prompts 
ing of British A< 
21 more at 337* 
remained on offt 

11, tat Banting 


Lpted renewed sefl- 
i Aerospace, down 
J37p, arid Pearson 


Financial Times Tuesday November 3 1987 


J - " TradWoiiai Options 

Aia 1Y1 • First dealings Not 62* 

er in ss-sms** 

clement Feb ISfbr raivttidic*. 
tzems see end qf London Share 
Service 

Stocks to attract money for the 
call Included Ac*fa Jewellery. 
Asti* Holding*, GUxot British 
H-rciioira * CrooZkM wo* Aerospace, Central and Shoe*. 

ami finished 23 .J Kalffnrll. ClnW 



higher 


bought a 
at 5 «Fi 


and finished 23 
r. interest was 


S.E ACTIVITY 


Indies Oct -30 


10 am 
1342-2 


11 am. 
1336.0 


Noon 

1348.4 


1 pm. 
1353-0 


2 pm. 
1350 J. 


3 pm. 
1342.4 


4 pm. 
1347.7 


pMgjboB W ID me “ S S S « pS Tl ^^tol^brateta 

•new shares. weiauo(n«)c«i — ■ w- 70 m34 *°f* 1214 emubmimsT! «aa 3ios US car manufacturers. Kwik-Fit 

News seaq B anaim ($■> «uon sum M **» - rallied 6 to 175p but other Motor 

SS K== : is = s 5: =: SS= - a 2SSM2S-* * 

Trading triggered a flurry of sejj- srnnTmUMD - - 7110 M9J 723A 7nh 355J Ewwv** 3280 387a * Klelnwort Grleveaon’a recent 

ing of British Gas shares which - — — — — — strong recommendation under- 

retreated to 142p at one point - i i.. --i H r, '1 2 nm. 1 3 pm. I 4 pm. pinned United Newspapers 

before settling a net 6 off at f Opening 10am. 11am. Noon lpm. 2 !pm. apm. &5 lp j but Associated drifted 

146p, after a turnover of over 1336.9 1343-2 1336.0 1348.4 1353-0 1350 J. 1342.4 1347.7 lower to end a net 7 cheaper at 

12m shares. British Gas de- — J - 1 — *- — - — _ ; — 457p. Paper/Printings moved ir- 

scribed the referral as “complete- Day's High 1353.4 Davy's low 1333.4 regularly with Norton. Opax los- 

^Dealers’reported an extremely — — 

n a ^- BEPOBT AND LATES T SHARE INDEX: T EL 01-246 8026 MSHETatSa 

easier. But Bank of Scotland 1 lifted Finlay Packaging 9 to 

continued to ' reflect brokers’ - , H band, spurted 6 to 18Bp on a its 400p per share offer for the ggn. 

views that the bank Is a safe and 6to turnover of 8.2m shares amid company following the deteriora- Leading Properties were able 

defensive stock in troubled tames 832p. vague market Tumours of a pos- tion in world market conditions. to consoEdate Friday’s gains foL 

and edged up 5 more to 505p. delink with French group War The latter, which revealed slight- lowing a quieter andcalraer 

TSB hardened a couple of pence at S6p. ^rice^thaJt ^ A vlfiW ^ ^ Iy disappointing interim results trade/Hopes of a further cut in 

to 11 Op following the egm where fidl in the shares had been over- yesterday, lost 16 at 295p. base rates shortly remained an 

shareholders approved the take- done lifted Thorn 3 to Tat* and Lyle remainedcm underpinning influence. Land 

over of Hill SamueL terms offered by Scottish & InoT n.— i a »» vun nffrr and shed 14 more to 606p, mm i dim d i r thmnah- 


remained on offer at 626p, down ^ advice in County 

ll.httHm.OMJM-KtawlK- SSyiSa yesterfW 

ponded to the good mtenm fig- ^^^JjjJS'ftjjyjajnentalout- 
ures with a rise of 26 to 466p. aSup? UK bum- 

Mcndo advanced 10 to 130, on 

Jaguar continued to suffer 

from its high exposure td the US 
dollar and closed 7 down at 322p 

but Loaf Industries rose 5 to 

521p following comment that the ■ ■“ 

group would shortly announce a 

Joint venture to supply brakes to . T /\w*rH 

US car manufacturers. Kwik-Fit ^k,T m ■ H-ff 'I 

rallied 6 to 176p but other Motor ■ I IV I 

Component and Distributor is- X w -»w -~- 

sues were usually easier. 


wood. North KalguxU, doff 
OIL Virgin, Control Securi- 
ties, IChT Norfolk Capital, 
Queens Moat Houses, Lwi’dg 
Rank, First Leisure, Dare* Es- 
tates, B. BUiott, P and O, Pow- 
encreen, OMOiy and Bock. 


Day's High 1353.4 Dap's low 1333.4 

Safe 100 Gen. Sn 150B«* R*4 InL lW8b Orthwj mtX, Gefcl Minn I2W55, S E ActWtjr 1W*. • NB-10JS. 

LONDON REPORT AND LATEST SHARE INDEX: TEL. 01-246 8026~ 


over of BOH SamueL t erms offeree py pcoTOan « 47^ w,wi plckM"up 4 to 214p offer and 

Klelnwort Benson were a Sleeting switching Mit of Plee- while B* 

shade easier at 447p as the mer- tor’s nurumal US expraure stood w feU 13 to 

chant bank confirmed that Sum- heading retail^ among the Interna 


COaill IKUUk UUIUUUItU UUtt uunr ^TT — - o 

h ^!l u n u “ itomo Life of Japan had acquired tish & Newcastte roe 13 fturther . rather quiet trading "session. 228p and GOongh Estates 

fmEu^aSd off SSE a Vh per cent stake in the com- to Hp nd Matthew Browm Apart from the ©mural uncer- pemS^ttSspL On th 

re - alSmSi the Oty pany; Kielnwor^ s S143m rights fereJa iSotT setbadTwooL tainty caused by settlem«it hand; Hanunerson A 

ait \mtil rmd-week to ““5?? d »“' “ worths dropped 26 to 307p as feara, underlying sentiment was ground in, the absence c 


retailers, amor 


, but 3 to Tate and Lyle remame dj m underpinning influence. Land 
up 4 to 214p offer and shed 14 more to oOop, Securities were steady through- 
out of Pies- while Bowntree M a ckin tosh out, dosing unchanged at 460p, 
fell 13 to 412p. ^ while MEPC firmed 8 to 41 8p. 

among the International stocks passed a British Land hardened 3 to 
-mere during rather quiet trading session. 228p and StaMh Estates picked 
weeks, suf- Apart from the general uncer- up a penny at 218p. On the other 


Elsewhere, Moorgate Mer- 
cantile, where Woodchester re- 
cently announced it had built up 
a 29.9 per cent stake, added 6 
more to 99p. 

Life assurances were quietly 


irjf-.i..-. nuihmrul lOta^fhT’ fereda minor, setback. WooL tainty caused by settlemrat hand, Hmmmerson A gave 

worths dropped 26 to 307p as feara, underlying sentiment was ground in the absence of take- 

-iT h8 i weekend reports of the immi- not helped by fretii weaknes in over developments, mooted re- 

pent departure of Maientm Par- the US dollar, and pncea failed cently, to ckne 17 lower at 443p. 

ned by hopes of lower Interest , nw:«r to KiriM on l«Kt Pridav’s recovery TsmtkTi Primu ftiM 


rates in the nes 

aagS|jS5 =rs 

composites remained unsettlwi mou ra co nfined the fall JnBPB ^ involvement of Dr Marwan. just a few pence cheaper. Bear 
by therecent profits downgrad- Lodusfalee to Jiat 3 Engineers presented a mixed ters, a particularly depressed Bat lad 

ings calculated by Morgan Sen- ^2p. Bine Circle settled un- J«VS“i which market oflate on its US expo- recent rea 


cheaper at 
tied only V 


at. Boots ended 13 shed 17 to 168p; the company 
it 23&PP, but Glaxo set- ^ acquired a 6-acre develop- 
Vt off at SH6 with Bee- me ntmte in Bast London for 


within 


by the recent profits downgrad- Lndusmes to Jiat 3 pence at 
in& calculated by Morgan Gran- 282p. Bine Circle settled un- 
feflT Commercial Union dipped changed at 3S9p, bat Tarmac 
8 to 323p, GKE 15 to 85Sp, G«n- slipped 5 to 229p. Barantt De- 
eral Accident 10 to 808p and vetopments were marlred (town 
Boyals 6 to 415p. to 165p initially, but picked up 

Strong buying by KLtcat & Ait- late in the sosion to close 4 
ken lifted insurance lacker ML- higher I6to. Costa l^ an other 
net 15 to 352p. takeovCT playwithin the sector. 

Computer stationery to bulk riipped 6 to fflSp. 
warehousing concern Fairway Currency considerations con- 
staged a successful debut in the tinued to mflnmeB ^ which 
IfeSstod Securities Market; the doeed te off at <10*. Elsewhere 
s hares, pla ced at 74p, opened at m the Chemical sector, Warfle 
74tepandmoved steadily Mghsr Storeys regdned composure land 
to close at 81p. rose 30 to 505p, whfle Laporte 

Elders XL postponement of the held at 370p. Amersham Later- 
proposed public offering of Cour- national <ame undari selling 


■eased Bat Indaartries continued its 
expo- recent reco v ery movement, ties- stod 

dt the fog 7 to the good at 443p after a asoa-mfi 
men- vonune of some K9m shares. 


the Involv^MiS oflfr NfervraiL few pmee cheat*/. W — 

EnSmere presented a mixed ters, a ?articular^ greased Bat Industrie* continued its 
™ l !~ V auDearance. Glynwed, which market of late on its US expo- recent recovery movement, clos- 
iST^oUS exSSTand is air- sure, took a distinct torn for the tog 7 to the good at 443p after a 
F V~®* xenthr btinflrecommended as a better in response to Press men- volume of some K9m shares. 

i i wmMm mmoi 

TZ Stajv.-aS ws* ss*e 


1SSSZS j5s a pSJrf 

36^bS?x£^ ap^ince.^Swed, which markrt* 
JP“ iiniltT has no US exposure and is cur- sure, too 

! ssssr gagm s 

ML higher 164p. Contain, another S??f 


northern 

IRELAND 

Hie Financial Timesgrwgoses to^publish aSurvqr 

Thursday, December 3, 1987 

For a fidl editorial synopsis and . d ^f i jl^ / ^ dlabU 
advertisement positions, please contact. 

BRIAN HERON 

on 061-834 9381 

or write to him «ts 
Alexandra Buildings, Queen Street 
Manchester M2 5LF 
Tplex: 686813 

FINANCIAL TIMES 

EU ROPES BUSINESS NEWSPAPER 


TRADING VOLUME IN MAJOR STOCKS 


Sudden demand In a thin mar- 


Otber misdSaneous Flnan- 
trended lower with do*e 


^^^iderationB con- fb^ ^to Slop to a »■ 23 to 200p and life, 

tinued to influence ICT which S>.dSw5I ia on the sharp fan ttonal Home Loan* losing 10 to 


iy r^ecting its US vulnera- 32 
f. eased 12 to 267p. News of In 


d^a^^dwrTfan ttaariHoS Loan. toting 10 to 
i half-year profits. Currency 173p. 


lent of the 
igof Cour- 


htid at STOp. Xmereham biter- Amei 
national came under selling 17 *p- 


lilUUU,Jl UUUW. UUClUlt wui- — | - 

age shares failed to enthuse the pressue and fell 21 to 40op. 
Brewery sector. Allied-Lyon* Britiah Telecom, when 
lost 7 to 338p, despite vague sug- shares wrat tiuuugh toe n 
gestiaiis of US brewer Anhenser dropped 9 to 238pafter a 
Busch bunding up a stake, recommenda tion, f rom sec 
while Whitbread “A” wnw baric house BZW. GEC, on the 


national came unaer seiung ____ , 

I Ma£lttiw!’«lnia«a weak ferine In the Food sector, 

house BZW. GEC, on the other whether or not to proceed with 


FT-ACTUARIES iNDICES 




These Indices are the joint compflatton of the Time*, 

the Instiftiite off Actuaries and the Faoritr of Actuaries 


EQUITY GROUPS 
& SUB-SECTIONS 
















































































































































































































































































































































$5* 


Financial Time? Tuesday November 3 1987 0 


WORLD STOCK MARKETS 


AUSTRALIA rCgotfawedl (JAPAN 


BELGIUM/UIXEMBOURG 


ira ii 








* Naan's 










CANADA 




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Indices 


NEW YORK-mw , 



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SKMW October 31 : Jkpu Hlkkel 2332 * 91 . T8E 191 


ftw Mtes of ad Indfcei ai 
2MJ am Amtnlla. All Ore 
10; and Toronto Composite 
40/83. T EuMq bento. 
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900 27V ♦ 


TOKYO - Moat Activ* Stocks 
Thosday, October 2S. 1987 


BP 

1WH 
I2JB 

ha , o* Iky 
VS1 -10 

heal 

ABM Tom 

Bond MM 

Boab 

Tutted 

55b 

5Jn 

*2a 

45a 

Me* 

2M 

135 

239 

mOto 
+ * 

- 2 

-13 

MUTHboob 

rac 

- Bj4b 

*2b 

228 - • 

IBB “+ B 

fhw* 

lMrBW*tHto 

U* - -4 Tme* 

Sm* Bpto»./kiB4l4l<JBWto% Tmntoy. 

__ 45i» 




Stock* Dntaa Baa* Stock* Dtatog Clang* 

Tiadm Hca* m D*nr Tnditl Men ■ D»y 

BManUStori B* 7 » 4 b 354 - I H*OMt-&mi 1 S. 7 S 8 n 7 BV + «3 

M*pm Kefcan 56 . 9 Mb 359 + B Mmtoskl Hwy Us 10488 n 6 S 1 - 4 

Mi4>MSto*l 54 . 1 Mb 441 - T Vettogm SO WMs . 10 . 74 Tb 1118 +140 

I rt im wf — H. bd- ZiMlm HI +32 Sfaowo DnAo 910 Gb 74 B + 7 

Tokyo $Ud 11345 b 3 . 42 D +180 tonUSwl 7368 b 6 B 8 + 7 


f /\\Tf\/\\T Chief price changes 
JLA/IN-LJvJlN On pence untess otherwise indicated) 


BISES: Harr. & Cros —548 + 23 

Brown(Matthew) .672 +ig Hunting Assoc 47 5 +35 

Etam . .284 +13 M & G Group _294 + 27 

Finlay Packag 98 +9 Mlnet .352 +15 


Rugby Group -214 + 12 

Scot & Newc. ..235 +13 

FALLS: 

Assoc Brit Foods295 -15 

Beiis ford (SfcW) 314 -57 


Brit Aerospace _337 

Close Bros 200 

Storehouse 361 

TI Group 287 

Tate & Lyle 608 

Woalworth ^ 07 


Have vour F.T. 
hand delivered in Norway 


If you work in the business centres of BERGEN. 
OSLO or STAVANGER — gain the edge over your 
competitors. 


- • ... at no extra charge, if you work in the business centre of 

: * ATHENS 

0 Athens (01)723710 And ask Bffl Vogiatzis for details, or call 

Hellenic Distribution Agency 0 (01) 9919328 

FINANCiALUMES 


JUU1 UUiW (U UV bAUd VUIUgb GUU JfUU fflll UV lUHj. 

and aiert to ail the issues that influence or affect your 

12 ISSUES FREE ^SlgSttk 


market and your business. 

When you take out your first subscription to the F.T., 
well send you 12 issues free. Then see for yourself why 
William Ungeheuer, rime magazine's senior financial 
correspondent, describes us as “the paper, with the best 
coverage of international finance.” 

0 Oslo (02) 684020 

And ask Heidi Aastorp atNarvesen AS for details. 


— Eun*pes Business Newspaper — * — 
. — , lomoB.fbntfaii-NniViit ■ ~ 


FINANCIAL TIMES 


i+nwUm-NroOfriil 


i 






























































































































































































48 






Financial Tunes Tuesday November 31987 

NFW YORK STOCK EXCHANGE COMPOSITE CLOSING PRICES 


12 


Kfe Ion 


» 9% 

3*a it% 

27 un, 

M% s» 
9% 3% 

1*4 8% 

731, 34 ij 

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67 40 

ZB 15% 

163, 9 

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P/ Sta 

SMk Dk YU. E lOOtHigh 

MR s J8 U21 402 u2D 

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AGS • 14 — 

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AMR 11 

ARX a 7 

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89% 

831, 


30 

181, 


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40 

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29 

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3.4 7 
0 0 
S3 7 


103, 7% 
1061, 811, 
104 70 

901, 77 
277, 12% 
281* 14% 
» 1SU 
34 201, 

377, IB 
30 151, 

341, 171, 

SB 343, 
B2i, 481, 
243, 41, 
20i, 81, 
34 151, 

49 31% 

1057, 52 
19% 9% 
24% I4>4 
44 15i« 

491, 27 
3% 1% 

37% 0% 
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34% 23 
64% 32% 
32 14 

291, 11% 
47% 321, 
417, 21% 

? & 

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31% 


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247, B 


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44% 

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20 
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90% 62 
907, 74 
03% 547, 

p a 

89 48 

17% 12% 

ss $ 

10% 3% 
55 33 

00% 40% 

93% 58 
00 54% 

357, 22i, 

S' Jft 

257, 14% 
13% 8% 
62 70 

54% 29 

a a 

12 % 9 % 
40% 21% 
37% 24% 

a » 

71% 34% 
19 11% 

22 % 0 % 

aft 

% % 
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9- 5? 

17% 0% 
15% 7% 
12% 7 
9% 37. 

101% 72 
83% 28% 
41% 14% 
27% 17% 
30% 17 
39 «% 

301, 1Q% 

?§% ja* 

ff 

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AfitnaC -40 
Acme£32b 
AdaEx£30a 
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Adves.ia, 

AotnU 2.75 
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AirbFrt 00 
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AlaP pflJSa 7.4 
AMP dp>07 W. 
AlaP pi B 10. 
AMP pi M8 
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Albtan ■ -48 
Alcan a -49 
AfcoS ■ .64 
AJexAix 1 
Alexdr 
AltegCp 
AlglM 
Algln pr 
AigLudalOa 
AHgPw202 
AHegta 1 
AflenG 06 
Allan pll.75 
AfldPd 
AkXSgnlJO 
viAHbC 

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AUMTunJHa 
AU.TLsl.52 
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AmxG DM 
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ABhIM 00 
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ACMR la 
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302 10% 
1 7% 

1PP9-S 
7901 3V, 
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18 104B IS*. 
M18 3091 607. 


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24% 25% + % 
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247 380 0% 

17 193 2P, 

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564 33% 
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S.3. 

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134 32 36% 

5 49 88% 

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40 208 117, 

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AHotat 73 7% 

AHoM pH 45 11. 2 10% 

AHWM804 44 13 2088 71 

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128 11 
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41% 43% +% 
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29% 30 + % 

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29% 13 
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21 % 11 % 
33 14% 

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S4i, 13% 
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12 4% 

15% 5% 
23% Wl 
41% 30 


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Am raps 
AmSm 1.W 
Anacmp 
Anadrk 40 
Anakm 
AncttS a 40 
Angelic .72 
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ApPw pO.12 
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Armada 

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Armlak M 
ArawE 40| 
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15.104 97 


1910 4053 31% 
27 787 11% 
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703 7% 
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291, 15% 
391, W% 


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201, 13% 
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42% 20% 


27% 11% 
87 36% 


23 17 


40% 27% 
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377, 19 

04 SOI; 


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09 

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W, 

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177, 


527, 49% 
53 51 


457, 25% 
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37% as 
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11 % 0 % 


55% 27 
27% 15 


42% 207, 
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34 

13. 

10. 

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14 
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14 10 2011 
24 18 530 12% 

30 14 1001 18 

74 57 40 

33 44 9% 

0 328910% 

BA 10 22% 

1Z 7 3B% 

3010 *913 30 
2411 460 17 
503 0% 

13 34 14% 

04 101, 

338 496 21 

7 3374 20% 

34 12 S03 51% 
313 0% 

7 00 7% 

14. 37 11% 

31 10 127 33% 
30 15 3177 «7>4 

14 1 182% 

383 73 34% 
0 248 4% 

24 30 90S 101, 
2-4 0 160 13% 

14 23 1001 43 
4.1 44 32 4% 

re w so ia 

2214 682 19% 
20 29 1238 25% 
0411 3390 25% 
10 611 20% 
B 

BET a 47a 37 13 15% 

BMC 224 47, 

BRE 240 9210 77 28% 

BalmcoflO 34 » 213 28% 
Bkittu n M 27 220217% 

BkrH pa40 74 180 46% 

Better -40 2410 722 19% 

B40 4024 13 239 34% 

BattyUf-S) 1.4 8 3436 16 

BaltGEISO 36 9 1041 33 

Balt (48440 27 *500 02 

BncOneJB 34 12 1237 237, 
BncCim25e 12 113 21% 

BnSai«i24a 4 51 44% 

BatiTx n 395 2 

Bandga -70 ia O 153 sen, 
BkBosI 1 4213 2193 24 

BkS pfB323a64 3 49 

BMC <JpO-72a72 
BkNY 140 33 12 

BnfcAm 

BkA p029a 11. 

BkA pl 6a 13 
BkA pl 248 
SrikTr ef.te ai 
Banner 40 A 10 134 
Bardajl-60a 31 9 10 



AKRo pr240 
AttooCp 
AodVd 
Aupal AO 
Autirat 42 
AulQOt -44 
Avalon 20a 
AVMCa 28 
Axery • -42 
Amat 40 
Avon 2 
Aydln 

B B 

47a 37 


+8% 

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S, 24% +% 
8% 0 
227, 

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22 
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26% 

26% 207, 

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24% 25% +% 
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9% 10% +% 

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30 30 +1 

28% 29% +% 
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67, 8 -% 

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197. 30% +% 
10% 20 +% 
50% 81% +% 
S% 0 

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11 % 11 % “% 
32% 33 +% 

78% 00 +?>? 

182% 102% +4 
33% 34% +1%i 
4% 4% +% 

151, 10% +% 
W% 13% -% 
41% «% +% 

47, 47, -% 

17 17% -% 

10% 18% -% 
94% 26% -% 
24 25 +7, 

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112 51% 
1161 34% 
38240 
13 29 

4 48% 

211 7% 
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18% 15% +% 
4% 4% -% 

25% 26% +% 
20% 20% -% 
18% 17% +', 
45 40% +1% 

10% 19 +% 

32% 34% +2% 
13% M% +% 
321, 32% -% 
50% 52 +% 

23% 23% -% 
20 20% -1% 
48% 43% -7, 

61% 61% -% 
33 337, +% 

8% 07, +% 

28% 29 

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10% 


40% 291, 
41% 271, 


20 % 11 % 

101, 3% 


297, n% BallMtS 


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93 


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30% 19% 

227, a 

437, 30% 


Bard -48 1-4 1? 2640 35% 
BarnG0-2O 39 12 100 31 

29 10 600 32% 

59 M 323 12 

204 3% 
27 1045 16% 
24 13 1304 35% 
19 21 7038. 


Barnet s 92 
BaryWr.SO 




Bax pW290a89 




15% 9% 
68 421, 


15-10 532 

2 W% 

70% 35% 
79% 601, 
33% 23% 


Bearing 1 
Bacor 9* 

s£ 

BelHwl 92 
BMUUI394 
BCE 0 2-40 


23% 12% 
44% 29% 
771, 421, 
42 25% 

557, 20% 
62 35 

330 Ml 
34% 2* 
2% 


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BMiln s -26 
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Continued on Page 


< . 








^ ^ I 


Financial Xuoes Tuesday November 3 1987 . 0 


49 


NYSE COMPOSITE CLOSING PRICES 


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are inofficial. Yearly Tdghfl and lows reflect the 
previoua & aMaks pkja the ourrant wa ak . but not tha latest 
Owing day- ^wra a aptt or stock dMdand amounting to 25 
par cant «- mow has bam pMd, ttw yearn high-low rwiBB and 
dMdand an shown tor ton new Mock only. Unless otherwise 
noted. Talas ol dividends ore annual dtaburaamantx based on 
the latest decfemUon. 

a-dMdend dbo Mctrafa). b-fcmurt rata of dridgnd pius 
stock OVridand. c-ft^ddaOng dMdand. o|d-aBted.d-naw yearly 
low. e^flvldend dectarad or paid In preceding 12 months, g- 
dMdand mGwwtton tends, sidijact to ISM ncn-fmidflnca tax. 
4-dividend dpettuod attar spfit-up or stock dhddmd. J-dMdand 
paid tMc year, omitted. daTarred, or no action tekm at latest 
dMdand meeting, k-dvtdend declared or paid this year, an ac- 
cumutatlva esuo "tth dhWonda in anears. n-new Issue in The- 
past 52 we*k»- The NgWow range begins with the start of 
trading, ndkwtt day daAwy. P/E-ptoe-eamings retia r-dhA- 
dend dackred or paid in praoadng 12 months, plus stodc dhi*- 
dand. s-atock apHt DhtofflS begin wtm date d aptt. sis - 
aetas. Hflvkland paid fai stock In preoadteg 12 montfa, eatt- 
mated cash value on ex-dtoldand or wKmbtoution dtaa. u- 
new yearly high, v-tradt-fi hahad vf-4n bankruptcy or reeshw- 
ahip or being reorganised undv the BenkmptcV Act, or secu- 
rities aegumod by such companies, wd-tfstributad. M-whon 
issued. WMHMth warrants. x+OMfluidaot or es-r^hts. «fl*-aa- 
.dtetrtbution. xwwtthout warrants. y-m-dMdand and Bales h- 


USG 1-12 £1 8 2707 38% 34% 3SV 


Travelling on Husiness to Athens? 


Enjoy reading your coraplirae ota ry copyof the FinaTtci^ITniies whenyou’re staying . . .althe Hotel 1 
Athenaeum, Astir Palace Hotel, Astir Vouliagmenis Hotel, Hotel Grande Bretagne, Hilton Hotel. 

FINANCIAt TIMES 

Europe^ BuiSne&tN&w^Mper— — ' 1 ■ 


iLoodQa-Itanldtei-NewYbrti 


AMEX COMPOSITE CLOSING PRICES 


P/ St 

Stack Db E TOO# High Low 
AWE 643 . 9% 67, 

AxanePr . 38 2% 2% 

Adflusll 279163 38 ' 37% 
AlbaW B M 61. C 

AtpiuUn 177' 5% 4% 

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Amdahl JO 132315 31% 30 
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AMMA SH B «7 M 13% 
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AP«B JOe 0 3 52% 82% 

APrac JD 49 2 13% 139# 

Amfloyll.71e 4 IQ 0^ 8 


AScE 156 65 
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3 
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Aamrg JO 2480 7 6% 

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Atari .. 10 841 7% 7% 

AOsCM 274 1 18-16 

AtUMt 134 .14% . 12% 

B B 

BAT J7e 105412 77, 7% 

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ChmpP* .40 17 121 32 30% 

ChtMdA J4 18 386 29% 29% 
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Cranm .401.10 12 18 17% 

ConcdF 0 tt 8% B% 

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Conatn . IB 38 5 4% 

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CrosM .88 15 283 24% > 23% * 
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CrCPB 32 10% 10 

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EodEn.ne 

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ENSCO 

EntUkr 

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FaMnd .80 
Fktaia 
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FtachP Jii 

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7 180 
11 223 

4 226 
22 261 
120 

8 307 
B 2473 

11 438 
15 140 


13'|- % 

2'a - % 
3%+ % 
17 - I, 
10% - 1; 
3+1. 
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27V + % 

1%+ % 
S%+ % 
7% — V 
3% + % 
3% 

2% - % 

itt + ” 
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ft Sh « » 

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R R 

rbw 10 55 34 3% 3% 3% + % 

Ragan .12 47 07 14 d12% 14 + % 

RoMbo JS| 204 7% 7% 7% + % 
RroJt A B 42S 30% 28% 3Q% + 1% 
Rein B 34z3450 131% 120 131% + 3, 
FbtAsB 11 76 12% 12 12%+ % 

RstAsASOe 1) 60 12% 12V 12% + V 

Roger, 12 21 74 S0% 20 20% + V 

RtKhck .328 11 38 16% 16 16 - % 


tea 9 


MCQ Hd 
MCO R* 
MSI Ot 
USR 
Matfteti 
MatSo 
Matrix 
Madias .34 
Mdcore 
MlchStr 
MtdAm 
MbsnW -32 
MbME J. 


54 

56 

17 89 
102 
60 

13 44 
586378 
40 268 
11 38 

10 321 
27 I 
2 49 
» 197 


M M 
0% 0 
% 6-16 
15% 15 

2 1% 
4% 4% 

141, 13V 
6 5% 

52V 907# 
3% 3V 
4 3% 

B 6 
7% 6), 

TO# 9% 


N N 

NVRyniJIi 8 457 47, 41, 

MrPatnt .10 443 7 Bt, 

NMsAr 6 57 14% 13% 

NPropl.Me M 22 21% 21% 

NWWE 6 88 41, 4% 

NYTIme .44 171635 33V 30 
NCdOG 283 3 M% 14% 

NudDl 4 2% 2% 

Numec- 29 24 B># 8% 

O P o 
OEA M 23 22i, 217, 

OdetA 96 7 0 5% 

OdecB 242 5 7i, 7% 

OOhiep n 8% 7% 

PallCn J4 IB 378 34% 23% 

ParinlC JO 11 121 23V 227, 

PtHeobiDOo 191 8 13% 13V 

PhILDa 4 1913 87, 7V 

PonrSy 68 1% 1% 

PltDsin 3 101- 10% 

PittwayIJO 12 1 71V 71V 

PopaEw 45 1 1 

ProadA .10 34 47# 4% 

PrcCma 1035 11% 10% 


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SbdCp JO 6 
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SikccAs 16 10 
Selltwi 9 
SpedOP 
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StarlSU 12 

smuw 

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58 234 11 
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TchAm 

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TrfflPtg .40 

TrtSM 

TutAla. 


USfllnd 

Ultra JBe 

UnValy 

UFoodAOSJ 

UFondB 

UnoPal 


vtAmCs .35 
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WanoB .10 
WangC .11 
Watl Pa t I J0 

wmfrd 
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WellAm 
wetGrd 
WDiflrtl 
WiirErd 
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OVER-THE-COUNTER 


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Stock 

A&WBd 

ADCs 

ASK 

AST 

Aconite 

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Adam 

AdlaS* .10 

AdobSs 

AdvTal 

AdwSy 

Aegon J4r 

AflBsn 

ApncyR t 

Agnlcog JO 

AirWisc . 

AlCOHK 

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AlexBre .18 
AiexSldlJS 

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A legW JO 
AlUant 
AHdBn 
AllwaM • 
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Amosst .44 
AWAW 
ABpkr JO 
AmCarr 
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AQreet- J8 
AmHriUOr 1 
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ASuNY.BOe 

ASNYptl-91 

ASoM .13 
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Aifloglc . 
Anich&v . 
AndvOc .72 
Andre •) 

An hoc JO 

ApogEn .14 

ApoieC 

AppIBk 

AppteCeUffl 

ABknel- 

Apkfflto 

ApMMt 

Archlva 

ArgoGp 

Armor JO 

Ashtons 

aog List JO 

AflRas 

ABSaAr 


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126104 10 
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142504 87, 

11 1753 ID 
SB 111 15V 
231182 14% 
0 290 7% 

17 411 M 
42 1785 25 
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20 441 11% 107, 111,+ % 

IB 315 171, 18 17i,+ % 

751 .18% 15% 18% +2% 

13 282 - 8 7% 77# - % 

0 176 11% 11% 11% - V 
1063 21% 2D 2S% + % 

6 567 11 9% 11 +1 

TO S00 44% 41% 48V +1% 

2308 8% 5% 5% + % 

5 106 10% 10 10%+ 7, 

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11 302 87, 0% 87,+ % 

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787 12V 117# 1£ - % 

121704 1BV 177# 18% + V 

4112375 20V 25% 20% +2 
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10 061 7% 

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111 „% 
13 345 10% 
12 127 9% 

25 4125 11% 
5 278 24% 
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271123 201, 
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10 301 20% 20% 20%+ % 

9 362 19% 18% »%+ V 

10 9B 8% 8% 8%+ % 

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B B 

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138 371, 36% 37V 

B 334 6% 8 6%+ % 

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13 642 13 11% 12% + % 

11 8 23 23 . 23 

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9 101 48% 48% 49 +2% 
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B 2249 251, 25% 25% - % 

9 -339 9% 8% 91, + V 

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10 155 19% 19 ‘ 

TO 85 a 7% 

1730 6% 5% 

28 591 18% 10 

128 5 4% 

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54 863 21% 10% 

8 302 32% 31% 

21 259 17 16% 

7 316 13% 12% 

16 242 0 7% 

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MV 


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8 81 29% 28% 29V + % 

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Autospa 

Avnwk 

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BairdC 
BakiFn la 
BatoJs .06 
BkLyB JO 
BaiBcp JO 
BnPncalJO 
BnPop 132 
OepHW 1.96 
Bancnc 
Sltt£ 134 
Bnkests M 
BnkgCtr JOs 
Bant# J4 
Barrte 
BsfitF JOa 
BayVw 
BayBk«1J4 
BeeutlC • 

Beebes J3e 
WKSh 
BwnJS » 

Berkley 38 
BerkHa 
BetzLb 1J2 
BgBeer t 
Blncfly 
Btogea 
Biomet 
BtoTGfl 
BirSil 
BickEn 1 
BomBn 1 J4 
BobEvn 34 

Bonoma.OSf 

BonvIP 
BostBcs JO 
BstnFC .48 

Branch 1J6 . 

Brand J6 677 11% OV 10% 

Brlcwtg • 405 4 3% * + % 

Bmknrn 9 194 ft JT* ft . 
Brunos JO 21 667 17% 17% 171# - % 

Budget 9 BO 10% TO TO - % 

Butteto 36 144 MV 15V 1BU 

BulBT 10 488 11% 11 11%- % 

Bmtwn 34 11 TO 15V Uh ~ % 

BuitBs • 80 545 7% 7 + % 

BMA 1.10 ' 150 35% 34% 34% -1% 

Bustnld 182345 6% 8 - W, + % 

c c 

CCG 17 1311 0% 8 Q 

coc 

CM* -M 

CUGint 
CVN 

CbrySclJto 
CadnK ' • 

Col gen J8e 
Cal Bio 
CalMIc 
Corny *18 

Cambra 
CamBS 
Conoid J2o 
Canonte 
CarewC 
CarlCm.07e 

Caringv 
Caseya 
CatoCp.028 
CeSCmS 
CntrSc UO 
Cemcor 
Cnitew 

CenBcal.lGb 
CirCOp ■ 

CFMBklJe 
CtyCfia 
Cehia 

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Cnrtwta 
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Chills 
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Chiron 
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CkmFnl J2b 
Cmtaas 
Cipher 
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CtzSoCp 1 
CtzFGa .68 
CtzU As 
CHyFed 04 
CtyNC .64 
CUyBcpI.tt 
Cteroor 1 
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coopek jo 

CoutF 
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CobeLb 
CocaBU J0 
Coeur 
Caharni 
Cotegen 
Cotadl .05o 
Corn Op .40 
COIOM 
Comcste.tt 
CmcsBp .12 
Cmenc£40 
CmClr 1JB 
CmcFdl 
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ComdE 
CpmSvg£4e 
CoipCn JO 
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CplAut 
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CDMod 
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CopyUe* 
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Crsstsr 1.04 
CntFdl 
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CmTr 
CrotodS JO 
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Culuma JO 
Cyprus 
Cypfiem 
Cytogn 

DBA 

DEP 

DMA PI 

DSC 

DahySy 

DartQp .13 

DISK) 

Dtatotch 

Datepy 

Datacp 

DauphnIJB 

Daxor 

Dayntn 

DnbSto 20 

Dekalb J2a 

Dost 

Devon 

DiagPr 

Dmaonc 

Diceon 

DlgdCm 

DigMic 

DfmaCTJO 

DbnaNY 

Dlonexs 

Dlxl«Tr.4CII 

DlrGnl JO 

DomBfc .72 

Dockets 

DreeSs 

Drsxlr 

DreyGr 

DunkDn J2 

DoqSys 

Durtn 

Durlron M 

□ynsca 

DytenC 

EMCs 


27 

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201 , 

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19 82 23% 23% 
131259 16 15 

2892 15 M 
221215 13% 1H, 

9 225 GO 47% 

23 299 20 
282030 7% 

10 340 6% 

B 418 22V 21% 
8 034 15% 14% 

121 231 W 
11 1041 5% 

11 «8 23 
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11 92 243, 23% 

92775 8% 0% 

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16 1232 7% 71, 

12 573 171, 16% 

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38 380 S'# 6% 

3 329 77, 71, 

6 133 9% 91, 

241 117, 11% 

386 10% TO* 
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7 140 SI 50% 
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367701 9% 81, 

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271401 

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3070 16 ' 14% 15%+ % 

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23 151 11V TO 11 

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132065 10% BV 10 +1%, 

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ElPas. 1.52 

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Emutex 

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EngCnv 

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Ensaco 

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Bmdt 

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EqtfBs J2 

ErtoTH JOB 

EsexCm 

EvnSm 

Evorax 

ExcalBeJSa 

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20 11B 29% 26% 

172BM 2% 2 

18 380 23V 23 

12 48B 26V 25 

42 005 18 15 

121 12V 11% 

5 15M Mi# 15% 

21 144 21 209, 

7 131 17% 17 

32 790 7 6 

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17 2174 10% 

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27 115 18% 13 
tt 178 21V 21 
21 025 16 M% 
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8 204 7 0% 

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58 1457 11% 

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13 30 15 MV 

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11 are m% 13% 
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13 175 38% 281, 

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17 000 0% 7% 

7 791 11 TO% 
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M 238 TO# 13V 


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FalrhvS 
FrmHm .50 
FamF 
FarGpalJO 
Feraflu 
Ftdtcr IJ2 
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FrftHTa 1.06 
Flggie8 .76 
RflOtaA M 

FlleNet 

FlnNvn 
Finlgan 
FAIaBk .70 
FeUUnIJO 
F|ABk .40 
FlATn 1.10 
FtExee 
FExplE2.iae 
FExplF2J8 
FExptG 
FFMkj .48 
FlFUas 
FlflBk .72 
FIHCps .44 


F F 


11% 

13% 

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11 

44% 


10% - V>F<ImN 1 JO 


B 240 12% 

21B 14% 

5 227 IB 

24 381 12 

132209 48% 

4 734315-16 3% 
TO 283 33% 32 
42 28% 56% 
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9 101 02 »% 

208 47 TO 

44 278 15% 13 
27 S77 7 6% 

93 201 M% 13% 

10 855 161# 16V 
T 47 40V »*• 
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FtKyNt 04 
FMdBs 1 
FNCInni 56 
FSeeC i.TO 
FtSvBk 
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FtVtoy 04 
FIWFti JB 
Fbstar 1.10 
Fisarv 
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FlaNBF M 
Fonara 
FUoAS .07 
FUoBs .06 
For Am JB 
FertoF JO 
Fonara JB 
FramSv 
FreaFdl JO 
Fremnt JO 
FullHB J2 

Galacg 

Gal Kaos 

GalgA JO 

GaMM 

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Continued on Page 47 












50 


0 Financial Times Tuesday November 3 1967 


FINANCIAL TIMES 


WORLD STOCK MARKETS 



Takeover offers underpin advance Dollar serves as mild depressant 


WALL STREET 


OVERCOMING a hesistant start 
and a • faimhiing dollar, Wall Street 
stock prices posted modest gains 
yesterday in light trading, unites 
Roderick Orem in New York. 

Bonds finally succumbed to cur* 
rency pressures and prices fell 
about three-quarters of a point in 
moderate trading. 

The Dow Jones industrial aver- 
age closed up 20.56 points at 
2.0Z4JD0. It had slipped some 25 
points shortly after the opening but 
a few stock index arbitrage buy pro- 
grammes helped push it up. It was 
the fifth gain in a row, the average's 
longest winning streak since July. 

Broader market indices per- 
formed somewhat better titan the 
Dow. The Standard & Poor's 500 in- 
dex rose 3.95 to 255.74 and the New 
York Stock Exchange composite in- 
dex added 1.94 to 142.74. 

Analysts warned, however, that 
the market was making a largely 
technical bounce from the deep 
lows recorded two weeks ago. In- 
vestors remain highly cautions 
about the potential for stock prices 
to rise strongly in the near term. 

A wave of takeover offers, 
prompted in part by lower share 
prices since the huge sell-off two 
weeks ago, helped underpin the 
market yesterday. Volume was 
light, however, with New York 
Stock Exchange trading shares by 
the time it closed 90-minutes early 
at 2.30pm. 

In the takeover arena, Santa Fe 
Southern Pacific rose £4% to S55 on 


more than 1.48m shares. Henley 
Group, down $1% to $20%, said it 
was negotiating to buy the railroad, 
property and natural resources 
group for $63 a share in cash and. 
securities. 

Santa Fe, which has been consid- 
ered a takeover target for some 
time, boosted some other railroad 
stocks. CSX edged up SK to $2714, 
Norfolk Southern added $% to $24%, 
Burlington Northern rose $3% to 
$63% and Union Pacific jumped $3% 
to $56%. 

Singer leapt $3% to $47% follow- 
ing a takeover offer of $50 a share 
from an investment group led by 
Mr Bilzerian, a Florida corporate 
raider. It had declared a 9.0 per cent 
stake in the aerospace electronics 
group last week. 

USG added Vk to $35% after its 
senior TnnnwptmAnt said they 
would not participate in a $50-a~ 
share leveraged buyout proposed 
last week by Desert Partners, an in- 
vestment group led by Mr Cyril 
Wagner ami Mr Jack Brown, two 

TVuant oilman. 

USAir jumped $1% to $32% and 
Piedmont Aviation soared $7% to 
$70%. Federal regulators approved 
the merger at the two airlines late 
last Friday. 

Bell and Howell rose $3% to $55. 
An investment group led by Mr Ro- 
bert P as s wnnthgr Texas oil man 
and raider, increased its stake in 
znannfac tnrer of m. 

trieval equipment to 15.9 per cart, 
or l.49m shares, by purchasing 
432,700 shares between October 12 
and October 28 at prices ranging 
from $4U6 to $69.05. 

Telex added a further $4% to 


555%. Mr Asher Ed eh nan, a New 
York investor, has began a $63 a 
share offer for the Tm>i»»r of compu- 
ter peripheral equipment 

Brockway gained $6 to S5L Ow- 
ens-Illinois has extended to next 
Monday its $6Q-a-share offer for the 
glass and plastics container group. 

Among companies reporting 
higher third-quarter p rofits yester- 
day, NWA, parent of Northwest Air- 
lines, fell $% to $39%. Other airlines 
were generally higher. AMR added 
$1% to $36%, Allegis rose $1% to 
$74%, Delta Airlines added $% to 
$38%, TWA gained $% to $19% and 
Texas Air edged up S% to $14% des- 
pite reporting a large third-quarter 


Thursday. Analysts said the market 
was in good technical shape to ab- 
sorb the new securities. 

As expected, the Federal Reserve, 
did $L5bn of customer repurchases 
which helped keep tine Fed funds 
rate steady at about 6% per cent 
Economic data yesterday 
little impact on the market. 

CANADA 


Genentech added $3 to $37. The 
leading biotechnology company re- 
ported third-quarter profits of 6 
cents a share against 5 cents a year 
earlier. 

Credit markets fell from the 
opening, finally succumbing to the 
pressure of a sliding dollar. By late 
afternoon the Treasury's 8.75 per 
cent benchmark long bond was off 
% of a point at 97 1 %i yielding 9.12 
per cent Short-term rates were 
sharply liigtw wi th, for example, 
three-month Treasury bills up some 
40 basis points at 5.80 per cent on a 
bond equivalent yield. 

The Treasury’s quarterly refund- 
ing begins today with the sale of 
$9.75bn of three-year notes which 
were trading yesterday in the 
“when issuer market at a yield of 
8.02 per cent, up seven basis points 
from Friday. 

It will sell $925bn of 10-year 
notes at the ‘second leg tomorrow 
and $4.75bn of 30-year bands an 


SOLID GAINS in gold issues off- 
set a flight decline in min— «mi 
metals to leave Toronto stocks 
slightly ahead at midsession- 
Golds were moetfe higher, 
with Lac Mjnerals rising C$% to 
C$10%, International Corona 
climbing C$2 to C$4716 and 
Echo Bay advancing C$l% to 


Among Une duns, Seagram 
climbed C$4fe to Bell 

Canada Enterprises advanced 
C$114 to C$37 and Canadian Pa- 
cific added C$3 to C$229k 
Northern Telecom, which plans 
to create a communications 
systems company in France, 
rose C$H4 to C$23. 

Mines staged a broad ad- 
vance, with Alcan Aluminium 
rising C$2 V* to C$33 1 * and Nor- 
anda gaining C$1 to CgZHA 

Bairns mostly firmed, with 
Royal Bank adding to C$28. 
It announced a withdrawal from 
underwriting and market mak- 
ing in Eurobonds. Canadian Im- 
perial Bank added C$Vfc to C$18. 
while Bank of Nova Scotia made 

up C$% to C$13Vk 

Energy issues were mixed. 

Montreal was modestly 
higher, while Vancouver posted 
strong gains. 


WORRIES over the outlook for 
the dollar and uncertainty 
about Wall Street’s recovery 
held European bonnes to nar- 
row price movements in quiet 
trade and only Madrid made 
substantial ground, writes Out 
M arkets Staff. 

FRANKFORT ended down, 
though off its lows, with some 
investors eeahing in Friday’s 
gains on pessimism over the 
prospects for the dollar. The 
Commerzbank index, measured 
at mid-session, fell 20l7 to 

Banks gave up ground, paced 
by a DMR50 fell by Deutsche to 
DH519J0. Bayernhypo was 
DM13 off at DM363 and BHF fell 
DM8 to DM400. Commerzbank 
shed DKL90 to DM245. Insurer 
Allianz, thnngh, made up DM13 
toDMMSS. 

Uncertainty over the dollar 
continued to depress ear mak- 
ers, with Daimler off DM9 at 
DM804, BMW down DM11 to 
DM900 and VW lower by DM250 
at DM272L90. Porsche fell DM10 
toDM650L 

BASF dipped DM8180 to 
DM365 and Bayer DM690 to 
DM287 in chemicals, addle 
Hoechstgave up DM4 to DM260. 

Computer stock Nindorf was a 
lone Ii v e wir e among electronic 
issues, adding DM14 to DMBS& 
Siemens feliered DM3 to DM484 
and AEG was DM430 behind at 
DM24B.70. 

Retailers fell modestly, Maasa 
most sharply by DM5 to DM275. 
Degussa, meanwhile, staged a 
DM15 rally to DM410 and Preus- 
sag rose DM6 to DM148. 

Engineers were mixed, with 

Manwwoninn off DM330 to 

DMISOlTO and Unde DM15 
cheaper at DM570. BHD was 
DM1630 down at DMUO, but 


LONDON 


THE CAUTIOUS rec o ve r y in 
(he Leaden securities markets 
na into the sand yesterday as 
Investors bac ked away In the 
fee* at uncertainties both at 
home and an overseas markets, 
writes Terry Hyland (a London. 

The FT-SE im Index dosed 
28.1 down at 1729.7, trashing 
aside a rally in New York In 
early trading. Turnover fell 
shar p l y from last week's hv- 
eh, a H hangh the new l y- issu ed 
shares in British Petroleum 
had another busy session. 

British Government bends 
edged lamer as the lutenattou- 
al s ec ur it i es hou ses braced 
for fee outcome of 


■■ — - w — 

fids week's$2S.75bn quarterly 
funding by the US Treasury. 
Rumour* of a s qu eeze on US 
bond traders fib® upset Loa- 


the outlook for UK markets 
and do mesti c interest rates 
still fangs on the shinty of the 
US authorities *to cobble to- 
gether anmcthtng on the US 
deficit which is acceptable to 
file marketplace,’' commented 
an equity marhetmakrr at a 
leading US bank in London. 

British Government stock s 
showed little response to Orion 
Royal Bank’s withdraws] 

— ...Wtm«lrfai| hi ITU fillto- 


MAN steadied at DM146 and 
Deutsche Babcock managed a 
DM10 gain to D1H80. 

ZURICH rose in patchy trade, 
buoyed slightly by moderate 
bargain hunting for bine chips, 
bat held back ny chronic cur- 
rency worries. The Credit 
Suisse index closed 64 higher 
at4t&5. 

Banks moved narrowly, UBS 
rising SFzao to SFxtiOO and 
Swiss Bank op SFtO to SFrSST. 
In mixed engineerings. Brown 
Bowers lost SFrfiD to §Fi2310 
and Snlzer registered fell 
SFrlSO to SFrMOQ. Saurex 
dipped SFW0 to SFrSSfi 

Holdings continued to make 
up for recent sharp declines, 
Adia recovering SFr250 to 
SFT7B0Q, Ascom SFiSSO to 
SFrSBOO and Holderbank 
SFrlSO to SFt4j825l Nestle fea- 
tured among foods with a 
SFT325 gain to SF**£7 Sl 

CIba-Geigy, though, loot SFM5 
to SFeSJD 5Q, while fellow chemi- 


cal 


p Sand oc picked up 


I to 

AMSTERDAM drifted broadly 
lower in the quietest session 
since the market turmoil broke 
on October 10. Bigger investors 
remained «««i* from the mar- 
ket, cautious over the direction 
both of the dollar and Wall 
Street stocks. The CBS all-share 
index slid 13 to 72. 

Among internationally-traded 
blue chips, Akzo fell a further 
FI 3 ton 117, Philips dipped FI 
160 to FI 3330 and Unilever fell 
F1 3.70 to FI 10730. KLM edged 
30 cents down to FT 3430. 

Fokker, however; defied the 
trend in the wake of last week’s 
mews of Dutch government sup- 
port, adding FI 230 to FI 3630i 

MADRID advanced for it s 
second successive session as in- 
vestors took heart from easier 
interest rates and central bank 
pledges to in tervene if neces- 
sary against the dollar's &1L 
The g e n era l index added 16 to 


with rising issues outpa- 
cing fells by more than 9-to-L 

Construction stocks laid the 
foundations, with b a nk s and 
chemical groups also rising. 

Telefonica, the market lead- 
er, added 16 percentage points 
to 171 per cent of par am id news 
of strong earnings growth. 

OSLO ventured cautiously 
higher in thin trade dominated 
by modest institutional portfo- 
lio rebuilding. The all-share in- 
dex crept up 535 to 31L00 in 
trade of justNKx'Man. 

Norsk Hydro picked up 
NKr230 to NKrlSSJO as just 
10300 shares changed hands. 
The Norwegian parliament yes- 
terday approved state partici- 
pation jn the majority state- 
owned group’s NKrSJjbn rights 
issue, due in the last week of 
November. Saga Petroleum also 
managed a NKz2 rise to NKrl22. 

In firmer banks, Bergen Bank 
made up NXr5 to NKriSS and 
Den Norske Cre d i t bank put on 
NKi&50 to NKriea 

BULAN fell in directionless 
and dull trade, weighed both fay 
currency worries and uncer- 
tainty surrounding the approval 
of Italy's 1088 budget The KB ' 
index closed L4fi per cent lower 
at 743. 

Flat continued its downward 
drift, closing LIQS off at U j f -, 
as did Montedison, losing 134 to 
143901 

HELSINKI crept higher in 
dull and hesitant trade on gains 
amnng Knnkfng and insurance 
stocks. The Unites all-share in- 
dex closed up 03 per cent at 
902. 

STOCKHOLM ended largely 
unchanged In nervous trade. 

PAWS and BRUSSELS were 
both closed for the All Saints 
day holiday. 


ASIA 


Higher yen trims Nikkei’s gains 


TOKYO 


THE CONTINUING decline of 
the dollar against the yen de- 
pressed activity in Tokyo yes- 
terday but share prices man- 
aged to move slightly higher 
after a poor, slow start, writes 
Shigeo Nishiutaki qfJifi Press. 

The Nikkei stock average of 
225 select issues, which shed 
207 points in mid-morning, end- 
ed 29.69 points higher at 
233583a Volume totalled 564m 
shares compared with Friday’s 
'934m. Advances led declines by 
484 to 360, with 140 issues un- 
changed. 

The market got off to a weak 
start as Institutional investors 
retreated to the sidelines be- 
fore Tuesday's market holiday. 
The yen’s surge against the dol- 
lar to the Y137 level was anoth- 
er discouraging factor. 

In the afternoon, a pause in 
the yen’s upswing helped ease 


investors* anxieties. A major Iih 
vestment trust company placed 
small-lot buy order s for 40 is- 
sues and the market turned up- 
ward. 

Selected small and medium- 
sued steel issues drew popular- 
ity. Tokyo Steel sowed Y160 to 
Y3y420 on a forecast of an lm- 
in its business per- 


Yodogawa Steel Works surged 
Y140 to Y1310 while Yamato 
Kogyo finished YB0 higher at 
Y1340- 

Large-capital 1 nation stocks 
recovered towards the close. 
Ishikawajima-Harima Heavy In- 
dustries was actively traded 
and gained Y32 to YB40 while 
Nippon Kokan added Y6 to 
Y359. 

Kawasaki Steel topped the 
most active list with 60.78m 
shares but closed Y1 lower at 
Y3S4 after losing Y7 at one 
stage. Nippon Steel also fell Y1 
to Y44L 

Chemicals posted moderate 



THE FIRMER bullion price was 
offset by a higher financial rand 
which triggered foreign selling, 
particularly in mining finan- 
cials, and left prices mixed with 
an easier bias. 

Heavyweights were mostly 
lower. Vaal Reefs lost R7 to 
R358, Randfontein shed R5 to 
R315 and Western Deep 


«_B4toBm 

ium and lightweight golds 

were mixed to higher. Leslie 
rose 25 cents to R6.75 but Lo* 
raine shed 25 cents to R24J25. 

In mining financials, Anglos 
lost 75 cents to R6835 and Gold 
Fields of South Africa dropped 
R3toH67. 


p jM on smalt-lot baying. Sho- 
wn Denko added Y4toY749 and 
Japan Metals and Chemicals 
rose Y21 to Y40L 

High-technology stocks 
opened lower, depressed by the 
yen’s surge, but some of them 
turned upwards towards the 
close. Matsushita Electric In- 
dustrial, which shed Y50 at one 
stage, ended Y10 higher at 
Y2JJ10. NTT gained Y3Q,000 to 
Y233m. 

After a firm start, bond Brices 
turned lower under profit-tak- 
ing The benchmark 53 per cent 
government issue, maturing in 
June 1006, dipped to 1465 per 
cent in early trading. Later, 
mounting concern about high 
prices lifted the yield to 4375 
per cent compared with Satur- 
day’s 4350 per cent . 

On the Osaka Securities Rx- 

^tofiuy^gbituest centiedon 
small-capital stocks. 

The 250-issue OSE stock aver- 
age^ cIo&e d^up^97. W ^a t a,76a 12 

Knrimoto, reporting good 
business results, advanced Yffi 
to T 1340, white Sekaicho Rub- 
ber ended Y120 higher at 
YU.TO. 

AUSTRALIA 


THE RETURN of some stabil- 
ity to the Australian dollar and 
signs of renewed foreign Inter- 
est triggered an early wave of 


burins which lifted abate 
prices sharply higher. 

The All Ordinaries index ad- 
ded 683 to 13608, a rally of 53 
per cent Volume, however, was 
low at 120m shares. 

Merchants, banks, transport 
and media stocks led the charge 
among blue chip industrials. 

Robert Holmes a Courtis Bell 
Group and Bell Resources, 
among the hardest hit fay the 
market shakeout, rose 20 cents 
to A$3 l 10 and 22 cents to to 
A$L72 on rumours of a possible 
takeover bid for BHP, which 
climbed 46 cents to A$73& 


HONG KONG 


A DAY OF see-saw trading 
. left share prices in Hong Kong 
mostly lower in moderate trade. 
The Hang Seng index 
363 to 2,20333 after giving 
eariy gains. 

Utilities took a beating as 
Hongkong Telephone lost 00 
cents to HK$1L9 0, Ch ina light 
fell 30 cents to HEI17.4Q and 
Hongkong Electric shed 15 
cents to HK$735. 

S elec tive bargain-hunting in 
bine chips l ifted Swire Pacific 
40 cents to HKH3.40 and Jar- 
dine Matheson 60 cents to 
HX$0L0a 

Among other blue chips, 
Hongkong Bank loot 5 cents to 
HK$7.40. Cheung Kong shed 30 

cents to HK$7.40 and Hutc hison 
was down 20 cents at HK$7.65 l 


Battered Singapore picks itself up 


SINGAPORE’S stock market, 
which has been one of the 
worst hit In the global down- 
turn, continued to recover 
some of Its nerve yesterday af- 
ter an almost relentless two- 
week battering, writes Roger 


The Straits Times 
index dosed 53.15 points 
higher at 87L7, wife most of 
tfae vin pwning b efore tench 
as bargain hunters appeared in 


Few brokers, however, have 
much confidence that this 
presages a more sustained, 
longer-tena rally. The psycho- 
logical damage that has been 
dene here should not be under- 
estimated,’’ commented one 

broker. "People are now trad- 
ing to sdl if they achieve a 16 
cent gain, but a lot of others 
are Just staring on the aide- 
lines.' 

Eves after the first Indica- 
tions of a rally on Friday, the 
index still stood 41 per cent be- 
low its opening on October 19 

anda foil 46 per cent down an 

the record Ugh of 1364.4 on 
August 15. Among the rest or 
the world's bigger market* on- 


ly Mexico and Australia And 
as badly. 

It has been doubly painful 
for Singapore be cause fee col- 
lapse came against the hock*, 
ground of a strong economic 
recovery from the 1985 reces- 
sion. with gross notional prod- 
uct showing a rise aT over 7 per 
cent in fee first half and more 
expected to fellow in fee third 
quarter. Cost-cutting measures 
adopted by fen Government 
were also pereetaot 
into significantly __ 
company profitability. 

Singapore was also my un- 
lucky. As trading began «■ Oc- 
tober 19, wife s entimen t al- 
ready depressed by Wall 
Street's perSarmaw* fee previ- 
ous Friday and the earlier 
opening of fee Tokyo market, 
news came through of a sh ee t 
lug incident in KnadaLampar 
which was qukkly Interpreted 
as the possible start ef racial 
c om Ofet i 

As the two countries are so 
doitete linked, wife more than 
half the quoted shares in Sin- 
gapore being Malaysian cam* 
PT*lffir. fee iwpnt was imme- 
diate. And when buyers 
emerged again the following 


week they w ere q u ickly 
elf fay Bears of farther trouble 
as fee Malaysian authorities 
ar rete d several dozen politi- 
cal activists, including Chi- 
nese members of parliament. 

Anxiety ever Malaysia will 
continue to be a depressant, al- ■ 
though sen time nt was helped 
yesterday by In d ications feat 
fee racial temperature had 
cooled in Kuala Lumpur. 

The Singapore authorities 
are taking credit for not hasti- 
ly dosing fee exchange, as oc- 
curred in Bang Kang, and Cur 
fee satisfactory performance of 
the new 1 "" 


ZAn shares exchanged. Sue 
Darby gained 17 cents to S$2J5 
cm a volume of 13m shares. 

El se where, Metre rose 05 
cents to 630 dlrs, Fraser ami 
Neave 50 to 730, Singapore 
Airlines 50 to 935, Perils Plan- 
tations 44 to 43*. Singapore 
Land 42 to 430, New Strait* 
Times 40 to 330, Sin g s por e 
Press 40 (e 730 and DBS 3$ to 


”Wbat we could do with 
Is a aaswfe of rotative calm and 
some indication that Washing- 
ton know s what it la doing, 
bath os regards its economy 
and the fte ef the dollar,' 
co mm e nte d a broker. "The owe 
thing we donat want now is for 
fee dollar to go into a free folL 
After what we have bora 
through feat would be the last 
straw." 

Newly-listed DBS land, fee 
most active stock on a turnover 
of 32m shares, dosed 11 rants 
h i g her at 8$L2& fryer Prod- 
ucts rose 3 cents to 3$ cents su 


- Among ether blue chips Haw 
Far was up 20 cents at S$3£t, 
National Iron gained 24 crate 
to S$4JA OCBC up 29 eeute to 
8«739 and COB was 20 cents 
higher at 8$530. 

Malaysian stocks 
Sime Darby, up 11 
. m Rothamns (NX 
which gained. 2$ cents to 
S94J8, ESC, adding 9 cents to 
S$13» and Betfutal, up 6 
cents to S92.7S. 

Consolidated Plantations ad- 
vanced It cents to S$136, 
Seating gained 24 cento to 
5$43B and RX Xfpong was np 
21 cents to S$14r7 and Malayan 
Banking climbed 22 cento 4» 

S9A46. Selangor 
was up 9 cents at 94 1 



Mexico? 



▲ 



Banco National de Mexico. 


Much has changed 

The Meg&an economy te opening to the worid 
The country enjoys a positive trade balance. 
Mexican international reserves stand at a new 
high. 

Few realize that Mexico, long known as an oB 
exporting nation, has increased non-oil exports from 
$4.5 HBton to $35 bffion in just four years: 

As the concept of the global economy becomes 
a reaBt); the strategic importanoe of Mesdco is becom- 
ing even mcxeevklent to the international bus- 
ness commur%Tbday over WOO “in bond" 
assembly plants in Mexico eftport competitive 
goods 19 world markets: 


New investment foc^ittves and joint ventures are 


When those questions concern Mexkxx the an- 
swers can be found at Banco National deMexkxx 

For good reason. 

Banco Nacionalcfo Mexico is a financia! institu- 
tion of siz^ knowledge and experience. A bank fhat is 
totally committed to respond with alacrity and an un* 
commonly high standard of professionalism to the 



Banco National de MaxfcaThe right answer. 


Banco Vlacional de (Tlfouco 


muifimi'uiiniiiiiiirirKiiiiiin nnnmftiiiiirn nrninmiurmiiiiiiinTTn nri wtshnsiiusisi iMVismMftiYWwnmiflrirni nra 

20^-109* TUae 1773871 . M UWYtm*37SPHrtAwnufl, NwItaH. N.Y. 1OTS2. USA XX S; 


Ontafo Canada 
240736 







*f \
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Full text of "Financial Times , 1987, UK, English"

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